Advanced Disposal Is Seeking New Investor Before Resuming IPO

Advanced Disposal Services Inc., the waste-collection company that postponed its initial public offering earlier this year, is working with bankers to sell a stake in the company that’s held by a single investor, according to people familiar with the matter.

The shares for sale are held by Canadian pension plan OPTrust, according to the people, who asked not to be identified because the process is private. OPTrust had a 20.6 percent stake in Advanced Disposal prior to the planned IPO, and was aiming to sell all of its common stock in the public offering, according to the prospectus.

Advanced Disposal postponed an IPO to raise as much as $471 million in February because of “unfavorable equity market conditions.” The day before the company’s shares were supposed to price, orders in the deal book were concentrated below the $20 to $22 marketed share price range.

The company, which is backed by private equity firm Highstar Capital, is aiming to revisit IPO plans in the late second quarter or the second half of this year, the people said. Deutsche Bank AG, Credit Suisse Group AG and Barclays Plc were hired to lead the initial public offering.

Highstar, which can trace its origins back to insurer American International Group Inc., was purchased by Oaktree Capital Group in June 2014. Oaktree took control of the group’s 2011 vintage pool, with investments made by earlier funds overseen by the existing Highstar team.

A spokeswoman for OPTrust declined to comment. Representatives for Advanced Disposal and Oaktree didn’t immediately respond to requests for comment.

Slow Start

Advanced Disposal isn’t the only company to postpone its listing recently. Airport restaurant and concession operator OTG EXP Inc. pushed back its offering that same week. This year has been the slowest start for U.S. IPOs since the recession with only nine companies listing, according to data compiled by Bloomberg.

OPTrust secured a preferred stake in Advanced Disposal after a company reorganization, which gave it special conditions at the IPO, according to the prospectus. If the deal priced below the $21 midpoint of the marketed share sale range, other shareholders would give OPTrust more stock to increase the pension plan’s returns. If it priced above, OPTrust would sell fewer shares in the offering.

OPTrust has about C$18.4 billion ($14.2 billion) in assets under management, overseeing the retirement savings for 87,000 former and current public-service employees in Ontario.

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