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VAUGHAN, ON - GFL Environmental Inc. (NYSE: GFL) (TSX: GFL), a North American environmental services company with a market capitalization of $18.2 billion, has secured exemptive relief from the Ontario Securities Commission (OSC) that allows the firm to repurchase its subordinate voting shares from underwriters in Ontario. According to InvestingPro data, the company’s stock is trading near its 52-week high of $48.87, suggesting strong market confidence in the company’s strategic initiatives. This permission is linked to any secondary offering related to registration rights held by certain shareholders, including BC Partners Advisors L.P., and affiliates of funds advised by HPS Investment Partners, LLC, among others.
The company, which recently sold its Environmental Services business, plans to use about $2.25 billion of those proceeds to opportunistically buy back shares, depending on market conditions. With annual revenues of $5.47 billion and a FAIR financial health score from InvestingPro, the company appears well-positioned to execute this significant share repurchase program. This could be through its normal course issuer bid or other lawful means. The OSC’s order enables GFL to repurchase up to 50% of the shares offered in any such secondary offering over the next 12 months, with a cap of 38,157,045 shares, which is 10% of its currently issued and outstanding shares.
These transactions are to be overseen by a special committee of independent directors to ensure that any repurchases are in the company’s best interests. The buyback price will be at a discount to the shares’ closing price on the TSX and NYSE on the date the associated offering is announced. The decision document from the OSC has been filed under GFL’s SEDAR+ profile.
GFL, headquartered in Vaughan, Ontario, ranks as the fourth largest diversified environmental services company in North America. It operates a network of facilities across Canada and in 18 U.S. states, employing over 15,000 people.
The press release includes forward-looking statements regarding potential future share repurchases. These statements are based on current management expectations and are subject to risks and uncertainties that could cause actual outcomes to differ materially. While GFL has made no commitment to execute any share repurchase, InvestingPro analysis indicates that net income is expected to grow this year, with analysts projecting profitability - insights that could be valuable for investors monitoring this development. For detailed analysis and additional ProTips about GFL’s financial outlook, investors can access the comprehensive Pro Research Report, part of InvestingPro’s coverage of over 1,400 US equities.
This news article is based on a press release statement from GFL Environmental Inc.
In other recent news, GFL Environmental has been the focus of several analyst updates and strategic developments. Jefferies analyst Stephanie Moore raised the price target for GFL Environmental to $55, maintaining a Buy rating, following the company’s Investor Day. Moore emphasized the conservative nature of GFL’s revenue and EBITDA guidance, suggesting potential for the company to exceed its financial targets. BMO Capital Markets adjusted its price target for GFL Environmental to $48, citing a Market Perform rating after the company’s fourth-quarter results fell short of expectations, though they acknowledged potential growth through mergers and acquisitions.
Stifel upgraded GFL Environmental’s stock rating from Hold to Buy, highlighting the company’s robust fiscal year 2024 performance, which included significant growth in adjusted EBITDA margins and free cash flow. The company’s projections for fiscal year 2025 indicate a revenue increase of 7.2%, surpassing consensus expectations. Meanwhile, Citi initiated coverage on GFL Environmental with a Buy rating and a price target of $53, reflecting confidence in the company’s future prospects.
BMO Capital Markets also adjusted its outlook, reducing GFL Environmental’s price target to $47 following the announcement of a deal to sell a majority interest in its Environmental Services division. This transaction is expected to lower GFL’s financial leverage and potentially boost its mergers and acquisitions strategy. The recent developments underscore GFL Environmental’s strategic maneuvers and the varied analyst perspectives on its financial outlook.
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