GFL Environmental Inc. Announces Commencement of Share Repurchase Program

Rhea-AI Summary

GFL Environmental has announced a new share repurchase program (NCIB) running from March 3, 2025 to March 2, 2026. The company plans to allocate up to $2.25 billion from the proceeds of its Environmental Services business sale to repurchase subordinate voting shares.

The program allows GFL to repurchase up to 28,046,256 subordinate voting shares, representing 10% of the public float. Daily repurchases will be to 64,492 shares, with exceptions for block purchases. The buyback will be conducted through TSX and NYSE facilities, with the majority of proceeds targeted at purchasing shares from sponsor shareholders.

GFL has received special permission from the Ontario Securities Commission to purchase up to 10% of its public float through NYSE and U.S.-based trading systems, exceeding the standard 5% limit. All repurchased shares will be cancelled.

Positive

• Large $2.25B share buyback program announced
• Special OSC permission to purchase up to 10% through NYSE
• Flexibility to make block purchases exceeding daily limits
• All repurchased shares will be cancelled, potentially increasing value for remaining shareholders

Negative

• Majority of buyback focused on sponsor shareholders rather than open market
• Previous buyback program saw zero share repurchases
• Sale of Environmental Services business required to fund buyback

Insights

Financial Analyst

GFL Environmental's announcement of a $2.25 billion share repurchase program represents a significant capital allocation decision, equating to approximately 13% of the company's current $17.3 billion market capitalization. This substantial buyback program will be funded through proceeds from the sale of their Environmental Services businesses, expected to close on March 1, 2025.

The structure of this repurchase is particularly noteworthy - the majority will target shares held by sponsor shareholders, with the remainder allocated to open market purchases. This approach suggests a potential reconfiguration of GFL's ownership structure, possibly reducing concentrated institutional ownership while supporting the stock's public float valuation.

The TSX approval allows GFL to repurchase up to 28,046,256 subordinate voting shares (10% of public float) over the next 12 months, with daily purchase limits of 64,492 shares. The company has secured special exemptive relief from the Ontario Securities Commission to purchase up to 10% of its public float through U.S. trading systems, providing greater flexibility in execution.

From a financial perspective, this repurchase program should be accretive to earnings per share by reducing the outstanding share count. However, investors should note that GFL's previous NCIB program (May 2023-May 2024) saw no actual repurchases despite authorization, raising questions about execution commitment this time around.

The timing of this announcement - immediately following a major business divestiture - signals a strategic pivot in capital allocation priorities. Rather than reinvesting all proceeds into remaining operations or debt reduction, management is expressing confidence in the company's current valuation and future prospects through this significant shareholder return initiative.

VAUGHAN, ON, Feb. 27, 2025 /PRNewswire/ - GFL Environmental Inc. (NYSE: GFL) (TSX: GFL) ("GFL" or the "Company") today announced that the Toronto Stock Exchange ("TSX") has accepted the Company's notice of intention to commence a normal course issuer bid (the "NCIB") for the 12-month period commencing on March 3, 2025 and ending no later than March 2, 2026. The NCIB will be conducted through the facilities of the TSX and the New York Stock Exchange ("NYSE") or alternative Canadian and U.S. trading systems, if eligible.

The NCIB only relates to subordinate voting shares, of which GFL had 381,570,455 subordinate voting shares issued and outstanding as of February 18, 2025. Under the NCIB, a maximum of 28,046,256 subordinate voting shares (representing 10% of the public float (the "Public Float") determined in accordance with TSX requirements as at February 18, 2025) may be repurchased by GFL. All subordinate voting shares repurchased by GFL under the NCIB will be cancelled.

"On January 7, 2025, we announced the sale of our Environmental Services businesses which we expect to close effective March 1, 2025," said Patrick Dovigi, Founder and CEO of GFL.  "We have allocated up to $2.25 billion of the net proceeds from the transaction to opportunistically repurchase our subordinate voting shares. We expect to use the majority of these proceeds to purchase shares held by our sponsor shareholders, with the balance to be used for open market purchases under our normal course issuer bid."

Purchases under the NCIB may be made by means of open market transactions, including through an automatic share purchase plan, privately negotiated transactions or such other means as a securities regulatory authority may permit. In accordance with TSX rules, any daily repurchases would be limited to a maximum of 64,492 subordinate voting shares, which represents 25% of the average daily trading volume on the TSX of 257,968 subordinate voting shares for the period from August 1, 2024 to January 31, 2025. The TSX rules also allow the Company to purchase, once a week, a block of subordinate voting shares not owned by any insiders, which may exceed such daily limit. The specific method, timing, price and size of purchases will depend on prevailing stock prices, general economic and market conditions, and other considerations.

Pursuant to exemptive relief granted by the Ontario Securities Commission ("OSC") to the Company on February 26, 2025, GFL is allowed to purchase up to 10% of its Public Float through the facilities of the NYSE and other U.S.-based trading systems as part of any NCIB implemented in the 36 months following the date of the decision, and will therefore not be limited on such trading platforms to purchasing 5% of its outstanding subordinate voting shares at the beginning of any 12-month period as Canadian securities laws would otherwise provide. A copy of the decision from the OSC has been filed under GFL's SEDAR+ profile at www.sedarplus.ca.

Subject to receiving exemptive relief from applicable securities regulatory authorities, GFL may also acquire subordinate voting shares through privately negotiated transactions. GFL expects that any private purchase made under an exemption order issued by a securities regulatory authority would be at a discount to the prevailing market price.

Under GFL's NCIB for the 12-month period that began on May 12, 2023 and ended on May 11, 2024, GFL was authorized to repurchase up to 17,867,120 subordinate voting shares, or 5% of its then issued and outstanding subordinate voting shares. No subordinate voting shares were repurchased thereunder.

About GFL

GFL, headquartered in Vaughan, Ontario, is the fourth largest diversified environmental services company in North America, providing a comprehensive line of solid waste management, liquid waste management and soil remediation services through its platform of facilities throughout Canada and in more than half of the U.S. states. Across its organization, GFL has a workforce of more than 20,000 employees.

Cautionary Note Regarding Forward-Looking Statements 

This release includes certain "forward-looking statements", including statements relating to the NCIB and the intended purchase for cancellation of subordinate voting shares of the Company thereunder, the methods by which any such purchases will be made, statements about the Company's beliefs and expectations, and the timing of any of the foregoing. In some cases, but not necessarily in all cases, forward-looking statements can be identified by the use of forward looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "is positioned", "estimates", "intends", "assumes", "anticipates" or "does not anticipate" or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking statements. Forward-looking statements are not historical facts, nor guarantees or assurances of future performance but instead represent management's current beliefs, expectations, estimates and projections regarding future events and operating performance. Forward-looking statements are necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by GFL as of the date of this release, are subject to inherent uncertainties, risks, changes in circumstances, and other important factors that may cause actual results to differ materially from those contemplated by the forward-looking statements, including but not limited to certain assumptions about our ability to complete the sale of the Environmental Services business on existing terms and to use the proceeds of any such sale for potential share repurchases. Important factors that could cause actual results to differ, possibly materially, from those indicated by the forward-looking statements include, but are not limited to, the factors described in the "Risk Factors" section of GFL's annual information form for the 2024 fiscal year filed on Form 40-F and GFL's other periodic filings with the U.S. Securities and Exchange Commission and the securities commissions or similar regulatory authorities in Canada. These factors are not intended to represent a complete list of the factors that could affect GFL. However, such risk factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. You should not place undue reliance on forward-looking statements, which speak only as of the date of this release. GFL undertakes no obligation to publicly update any forward-looking statement, except as required by applicable securities laws. Purchases made under the NCIB will be subject to various factors, including GFL's capital and liquidity positions, debt covenant restrictions, accounting and regulatory considerations, GFL's financial and operational performance, alternative uses of capital, the trading price of GFL's subordinate voting shares and general market conditions. The NCIB does not obligate GFL to acquire a specific dollar amount or number of shares and may be extended, modified, or discontinued at any time at the Company's discretion.

For more information:

Patrick Dovigi
+1 905 326-0101
 pdovigi@gflenv.com

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SOURCE GFL Environmental Inc.

FAQ

How many shares can GFL Environmental repurchase under its 2025 NCIB program?

GFL can repurchase up to 28,046,256 subordinate voting shares, representing 10% of the public float as of February 18, 2025.

What is the maximum daily purchase limit for GFL's share buyback program?

The daily purchase limit is 64,492 subordinate voting shares, representing 25% of the average daily trading volume on TSX.

How much has GFL allocated for the share repurchase program?

GFL has allocated up to $2.25 billion from the Environmental Services business sale proceeds for share repurchases.

When does GFL's new share repurchase program begin and end?

The program runs from March 3, 2025 to March 2, 2026.

How many shares did GFL repurchase under its previous NCIB program?

GFL did not repurchase any subordinate voting shares under its previous NCIB program that ran from May 12, 2023 to May 11, 2024.