GFL Environmental Inc., a Canadian waste management firm, has engaged in investment discussions with U.S.-based private equity firm Apollo Global Management Inc., according to a source familiar with the matter. The talks, which became formalized in late May, involve considerations of a potential investment or takeover while GFL’s share price remains subdued compared to its North American peers.

GFL’s board of directors has established a special committee to evaluate any offers, but a full acquisition would likely depend on the support of founder and CEO Patrick Dovigi, who holds approximately 25 percent of voting shares through multiple voting stock. Without his endorsement, potential buyers, including Apollo, may seek to acquire shares currently held by BC Partners and GIC, Singapore’s sovereign wealth fund. BC Partners led GFL’s recapitalization in 2018, and private equity firms typically maintain positions for five to seven years.

Since its initial public offering in March 2020, GFL’s shares have seen periods of growth, doubling in value on U.S. exchanges, yet have underperformed recently. Over the past year, GFL’s stock declined 18 percent, while competitors Waste Management Inc., Waste Connections Inc., and Republic Services Inc. have experienced relatively stable or modestly negative returns. In contrast, the S&P 500 index gained 19 percent in the same timeframe.

News of the investment talks led to a 7.6 percent rise in GFL’s share price in Toronto on Friday, bringing the company’s market capitalization to around $21 billion. U.S. markets were closed that day due to the Independence Day holiday.

Any potential full buyout would involve complex arrangements for Mr. Dovigi’s shares. According to the source, he would be expected to roll his holdings into a private investment vehicle controlled by the buyer, ensuring he remains a significant shareholder. This structure could also accommodate minority investments, with BC Partners and GIC possibly reinvesting proceeds through the same vehicle.

Apollo and GFL have an existing relationship dating back to January 2025, when GFL sold a majority stake in its environmental services division to Apollo and BC Partners for $6.2 billion. This transaction provided GFL with cash to reduce its debt burden. That division, which offers services like liquid waste management and soil remediation, had been put up for auction in mid-2024, reflecting prior strategic considerations when GFL’s shares were similarly undervalued.

At that time, GFL retained J.P. Morgan as a financial adviser to examine options including privatization and divestiture. The company ultimately chose to sell the division and maintained a stance that going private was not in shareholders’ long-term interests. However, with renewed talks now underway and J.P. Morgan again advising, the possibility of taking GFL private has resurfaced.

Complicating any potential takeover is GFL’s ongoing $5.4 billion acquisition of Calgary-based Secure Waste Infrastructure Corp., announced in April. The deal is primarily stock-based, with Secure shareholders expected to receive 80 percent in shares and 20 percent in cash. Given that Secure shareholders will become part owners of GFL, any future change in control would likely require their approval, as well as conditions ensuring the Secure transaction is completed.

For a full acquisition to proceed, bidders will need to offer a price that satisfies shareholders confident in GFL’s long-term growth potential. With the company’s stock depressed but its business prospects regarded as strong by management, any deal is likely to involve careful negotiation among all stakeholders. Both GFL and Apollo declined to comment on the discussions.