EQT seals USD-5.3bn deal to buy waste-to-energy provider Covanta

EQT Infrastructure, a fund managed by Swedish investment firm EQT AB (STO:EQT), has struck a deal valued at USD 5.3 billion (EUR 4.48bn) to take over US waste-to-energy company Covanta Holding Corp (NYSE:CVA).

The agreed purchase price of USD 20.25 per share is a premium of about 37% to Covanta's unaffected share price of USD 14.86 on June 8, which is the last day before initial media speculation emerged, the announcement notes. The aforementioned deal value includes net debt assumption.

The transaction is awaiting stockholder and regulatory clearance and is seen to close in the final quarter of the year. It is the result of a competitive sale process.

Morristown, New Jersey-based Covanta operates 41 waste-to-energy plants in the US, Canada and Europe. Together, they process about 21 million tonnes of waste from municipalities and businesses each year, converting it into renewable power. This year, the company is expected to generate adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of between USD 460 million and USD 480 million.

"This agreement represents the successful completion of many months of work by members of Covanta's senior leadership team as they executed the in-depth review of the company's operations, growth priorities and capital structure announced in October of last year,” commented Sam Zell, Covanta's chairman of the board.

BofA Securities is Covanta’s financial advisor with regard to this deal, while Debevoise & Plimpton LLP provides legal counsel. On the other hand, Barclays acted as lead financial advisor to EQT Infrastructure and Kirkland & Ellis LLP served as legal counsel. Credit Suisse and TD Securities also were financial advisors to the buyer.

(USD 1.0 = EUR 0.846)

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