Why EQT Infrastructure Is Buying Covanta Holding (CVA) In $5.3 Billion Deal

By Amit Chowdhry ● July 14, 2021
  • Covanta Holding Corporation (NYSE: CVA) announced that it entered into a definitive agreement with EQT Infrastructure (EQT) in a $5.3 billion deal. These are the details.

Covanta Holding Corporation (NYSE: CVA) — a world leader in sustainable waste and energy solutions — announced that it entered into a definitive agreement with EQT Infrastructure (EQT). EQT will buy all shares of Covanta common stock for $20.25 per share as part of a $5.3 billion deal. 

The purchase price represents about a 37% premium to Covanta’s unaffected share price of $14.78 on June 8th, the day prior to the initial media speculation of a transaction. And the acquisition is subject to Covanta shareholder approval as well as customary government approvals. And it is expected to close in the fourth quarter of this year. The deal resulted from a competitive sale process and is not subject to a financing condition.

Covanta is known as the world’s leading waste-to-energy provider, operating facilities in North America, Europe, and the UK. And every year, Covanta’s 40+ facilities process about 21 million tons of waste from municipalities and businesses and convert it into renewable electricity to power over one million homes.

Upon the completion of the acquisition, EQT will work with Covanta’s management team to build upon its impressive strengths including its portfolio of assets that provide essential waste services to municipalities and commercial customers, its long-term community relationships as well as its numerous growth opportunities, including through a robust UK project pipeline of new waste-to-energy infrastructure and Covanta’s Environmental Solutions platform. And Covanta will maintain its corporate headquarters in Morristown, New Jersey, and its management team is expected to remain in place.

KEY QUOTES:

“We are pleased to announce this agreement with EQT. Our comprehensive analysis during the past nine months has been singularly focused on enhancing value for our shareholders. EQT certainly recognizes the value we see in our business, and this transaction represents an excellent outcome of our strategic review. Furthermore, as an organization dedicated to sustainability and environmental stewardship, EQT shares our vision for a safer, cleaner and more prosperous future through sustainable waste management thereby ensuring no waste is ever wasted. We couldn’t ask for a better partner as we embark on this next phase of our company’s evolution, delivering on our goal of building a sustainable future for all stakeholders.”

— Michael Ranger, Covanta President and CEO

“EQT and Covanta are proven business leaders who share a like-minded approach to environmental stewardship, and this acquisition aligns directly with EQT’s thematic approach of investing in sustainable businesses that have a positive impact on society. EQT is excited to partner with the entire Covanta team and to invest in organizational, operational, and digital technology initiatives that will enhance Covanta’s ability to provide sustainable solutions to growing waste challenges. As a responsible investor, EQT is committed to working with Covanta on transforming and supporting the energy transition and circular economy across its local communities.”

— Alex Darden, Partner within EQT Infrastructure’s Advisory Team

“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. This fulsome effort culminated in a competitive process that we believe provides the best risk-adjusted value for shareholders.”

— Sam Zell, Covanta’s Chairman of the Board

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.