GFL shares surge on report of PE bidding war

Investing.com -- Two competing private equity consortiums have emerged for GFL Environmental (NYSE: GFL), setting up a bidding war over a target carrying $28 billion in combined equity value and debt, Bloomberg News reported Wednesday evening.

GFL shares surged 8% in pre-open trading Thursday, with CEO Patrick Dovigi stating explicitly that the company is open to a deal above the current market price.

According to Bloomberg News, KKR & Co., Energy Capital Partners, and Blackstone Inc. have formed one consortium, while Brookfield Asset Management and IFM Investors — an Australian industry superannuation-backed infrastructure fund with a mandate to deploy long-term capital into essential services, have teamed on a rival offer. GFL carries a market capitalization of roughly $18 billion alongside approximately $10 billion in debt, per Bloomberg News, implying a total enterprise value approaching $28 billion.

Speaking on Bloomberg TV earlier Wednesday, Dovigi said he is open to taking the company private at a higher valuation than its current stock price. The CEO indicated he would roll his entire ownership stake into any transaction, a structure that reduces the cash equity required from the winning consortium and aligns management with the long-term infrastructure thesis driving both bids.

GFL’s special committee, formed in July after the company retained advisers following preliminary takeover interest, is expected to take time evaluating the competing proposals and could ask bidders to sharpen their offers.

A decision on a sale could come within weeks, according to Bloomberg News, though the process remains fluid.

The structure of both consortiums revives the so-called club deal format, where multiple buyout firms pool capital to pursue targets too large for any single fund, that was prevalent during the early-2000s LBO boom but fell out of favor after delivering weak returns and drawing LP concern over concentrated risk, as Bloomberg News noted. The appetite for jumbo infrastructure assets has pulled the format back into play for deals of this scale.

At roughly $28 billion in enterprise value, a completed GFL transaction would rank just below the AES Corp. takeover, currently the largest announced North American LBO of 2026 at approximately $33 billion including debt, making this one of the defining private equity events of the year.

GFL’s operational profile makes it an attractive infrastructure target. GFL has 15,000 workers and a network of transfer stations, recycling facilities, and landfills spread across Canada and the United States. The company recently closed its combination with Secure Waste Infrastructure Corp., expanding its footprint in western Canada and in industrial waste management and energy infrastructure, adding revenue streams with the long-duration, contracted characteristics infrastructure investors prize.

On the publicly traded side, waste sector peers Waste Management (NYSE: WM) and Republic Services (NYSE: RSG) trade at premium EV/EBITDA multiples that reflect the sector’s defensive cash flow profile, and a takeout of GFL at a meaningful premium could lift valuation benchmarks across the group. The most direct equity expression of the broader waste-infrastructure bid cycle remains GFL itself; any formal bid announcement or committee recommendation would crystallize the premium Dovigi has flagged as his floor.

Canadian regulatory considerations add a layer of complexity the market will need to price in. Given GFL’s dominant position in Canadian municipal waste markets, a transaction of this scale will almost certainly attract scrutiny from Canada’s Competition Bureau, a process that could extend the timeline well beyond the weeks cited for the committee’s initial decision.

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