Advanced Disposal Said Planning to Restart IPO in Next Month

  • Waste-disposal company scuttled first attempt in February
  • Advanced Disposal cited market conditions for postponement

Advanced Disposal Services Inc. is aiming to move ahead with its plan to go public in the next few weeks, after the waste-collection company postponed an initial public offering in February, people with knowledge of the matter said.

The company, which is backed by Oaktree Capital Group LLC’s Highstar Capital and the Canada Pension Plan Investment Board, will seek to raise about $400 million, said the people, who asked not to be identified because the matter is private.

Representatives of Advanced Disposal, Oaktree and Canada Pension declined to comment.

Advanced Disposal got as far as setting the terms for its planned IPO. Along with existing shareholder OPTrust, a Canadian pension plan, the company was offering 21.4 million shares for $20 to $22 each, to raise about $471 million at the top end of the range.

The Ponte Vedra, Florida-based company cited unfavorable market conditions for the postponement -- one of a number of private equity-backed portfolio companies to delay a public offering earlier this year. The climate may be changing: 10 companies are scheduled to go public this week, which would be the busiest for U.S. corporate IPOs since June 2015, according to data compiled by Bloomberg.

Deutsche Bank AG, Credit Suisse Group AG, Barclays Plc and UBS Group AG are leading the offering, according to an updated prospectus filed this month.

Canada Pension

Advanced Disposal, which hasn’t made a profit for at least the past five years, according to the prospectus, posted a net loss of $33.6 million in 2015 on service revenue of $1.4 billion. For the previous year, the loss was $17.1 million on revenue of $1.4 billion.

In March, the company was working with bankers to sell OPTrust’s stake. As of Feb. 1, OPTrust held almost 13 million shares in the company, about 21 percent. The fund had secured a preferred stake in Advanced Disposal following a reorganization, which gave it special conditions in an IPO.

Canada Pension bought a $280 million stake in Advanced Disposal from an investor and its partner, Michael Koen, joined the waste-disposal company’s board, according to an August filing that didn’t identify the selling stakeholder. That accounts for most of OPTrust’s stake, according to one of the people familiar with the matter.

Canada Pension is listed in the prospectus as a shareholder with at least a 5 percent stake, while OPTrust is no longer listed as a principal stockholder.

Advanced Disposal’s backer 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.

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