Infrastructure Buyout: Waste-to-Energy Firm Covanta Agrees to EQT
July 14, 2021- 10:51 a.m.
Waste–to–Energy Firm Covanta Agrees to EQT Infrastructure Buyout Waste-to-energy company Covanta agreed to be acquired by investment firm EQT Infrastructure for $20.25 a share in cash.
The purchase price is a 37% premium to Covanta’s $14.86 level on June 8, the day before media speculation about a transaction began.
The deal value including debt is $5.3 billion.
Covanta recently traded at $19.89, up 7.1%. The shares have soared 38% in the three months through Tuesday amid the speculation.
Under the terms, holders of the Morristown, N.J., company will receive $20.25 cash for each of their shares.
“Waste-to-energy is a vital part of the waste disposal value chain, offering a far more sustainable alternative to landfilling waste for communities and businesses,” EQT said.
Waste-to-energy entails “a significantly smaller real estate footprint per ton disposed compared to traditional landfills.”
Further, “the process ensures optimal use of waste by reducing waste volumes by 90% that would otherwise get landfilled and eliminating nearly one ton of greenhouse gases equivalent per ton of municipal solid waste” among other things, EQT said.
The companies hope to close the deal in the fourth quarter, subject to conditions including government clearances and a vote of Covanta holders.
Shell said it would increase shareholder returns to between 20% and 30% of free cash flow, starting with a payout from second quarter earnings.
It will also keep its capital spending plan at $22 billion.
The company also boosted its forecasts for production, sales volumes and natural gas output.
