By Abigail W. Adams
Portland, Me., March 3 – GFL Environmental Inc. priced an upsized $775 million, or 15.5 million units, of $50-par three-year tangible equity units after the market close on March 2 at the midpoint of talk for a dividend of 6% and a threshold appreciation premium of 20%, according to an FWP filing with the Securities and Exchange Commission.
Price talk was for a dividend of 5.75% to 6.25% and a threshold appreciation premium of 17.5% to 22.5%, according to a market source.
J.P. Morgan Securities, BMO Nesbitt Burns Inc., Goldman Sachs & Co. LLC, RBC Capital Markets and Scotia Capital Inc. were joint lead bookrunners for the registered offering, which carries an upsized greenshoe of $116.25 million, or 2.325 million units.
Barclays Capital Canada Inc., BC Partners Securities LLC, Raymond James Ltd., Stifel, Nicolaus & Co., Inc. and TD Securities Inc. are joint bookrunners.
The initial size of the offering was $700 million, or 14 million units, with a greenshoe of $105 million, or 2.1 million units.
The units consist of a prepaid stock purchase contract and a senior amortizing note.
The purchase contracts may be settled on or after March 15, 2021 subject to a 130% hurdle.
Concurrently with the equity units, GFL Environmental priced an IPO of 75 million shares at a price of $19.00 per share.
In all, 73,361,842 shares were offered by the company and 1,638,158 shares were offered by selling shareholder Josaud II Holdings Inc., an entity owned by Patrick Dovigi.
The initial size of the IPO was 71,652,440 shares with 1,518,293 shares offered by the selling shareholder. The initial range was $20.00 to $21.00.
The IPO carries a greenshoe of 11.25 million shares.
Proceeds from the concurrent offerings are $2.2 billion.
Proceeds will be used to redeem the company’s outstanding 5.625% senior notes due 2022, 5.375% senior notes due 2023, $270 million of the principal amount of its 7% senior notes due 2026, $240 million of its 8.5% senior notes due 2027 and for general corporate purposes, including possible acquisitions.
GFL Environmental is a Toronto-based environmental services company.
| Issuer: | GFL Environmental Inc.
|
| Securities: | Tangible equity units
|
| Amount: | $775 million, or 15.5 million units
|
| Greenshoe: | $116.25 million or 2.325 million units
|
| Maturity: | March 15, 2023
|
| Lead bookrunners: | J.P. Morgan Securities, BMO Nesbitt Burns Inc., Goldman Sachs & Co. LLC, RBC Capital Markets and Scotia Capital Inc
|
| Joint bookrunners: | Barclays Capital Canada Inc., BC Partners Securities LLC, Raymond James Ltd., Stifel, Nicolaus & Co., Inc. and TD Securities Inc.
|
| Co-managers: | BofA Securities, Inc., CIBC World Markets Inc., HSBC Securities (Canada) Inc., National Bank Financial Inc.
|
| Dividend: | 6%
|
| Price: | Par of $50
|
| Appreciation premium: | 20%
|
| Appreciation price: | $22.80
|
| Settlement rate: | Minimum 2.1930, maximum 2.6316
|
| Call options: | On or after March 15, 2021 subject to a 130% hurdle
|
| Pricing date: | March 2
|
| Settlement date: | March 6
|
| Distribution: | Registered
|
| Talk: | Dividend of 5.75% to 6.25% and a threshold appreciation premium of 17.5% to 22.5%
|
| Stock symbol: | NYSE: GFL
|
| Stock reference price: | $19.00 in concurrent offering
|
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