GFL Environmental (GFL.TO) on Tuesday said it is selling its environmental services business for an enterprise value of $8 billion to Apollo Funds and BC Partners.

GFL will retain a 44% stake in the business while Apollo Funds and BC Funds will each hold a 28% stake. The transaction is expected to close in the first quarter.

The company also expects to realize $6.2 billion cash proceeds, net of the retained equity and taxes. Of this, $3.75 billion will be used to pay down debt, with the rest going to share repurchases and general corporate purposes. The debt repayment is expected to cut its annualized cash interest expense by $200 million, GFL said.

"The sale of our Environmental Services business at an enterprise value of $8.0 billion is substantially above our initial expectations and is a testament to the quality of the business that we have built," said Patrick Dovigi, Founder and Chief Executive Officer of GFL. "The transaction will allow us to materially delever our balance sheet which will accelerate our path to an investment grade credit rating. A deleveraged balance sheet will provide ultimate financial flexibility to deploy incremental capital into organic growth initiatives and solid waste M&A and allow for a greater return of capital to shareholders through opportunistic share repurchases and dividend increases, while maintaining a targeted Net Leverage in the low 3's."

GFL was last seen up $1.69, to $64.78, on the Toronto Stock Exchange.