EQT is buying Covanta Holding Corporation, an owner of waste-to-energy (WtE) facilities in North America, in a $5.3bn (€4.5bn) deal.

The global investment firm said its infrastructure arm has agreed to offer Covanta’s shareholders $20.25 for each share of Covanta, an offer price which represents a 37% premium to Covanta’s share price on 8 June, the day prior to initial media speculation of a transaction.

The offer price values Covanta at $5.3bn, including the assumption of Covanta’s net debt obligations, EQT said.

Headquartered in Morristown, New Jersey, Covanta has 41 WtE facilities in key metropolitan areas across the US, Canada and Europe. Covanta’s three diversified and complementary business segments comprise waste processing and services, energy production and metals recycling.

Under EQT’s ownership, Covanta will continue to differentiate its service offerings, with a focus on innovation and sustainable energy, EQT said. The transaction is expected to close by year-end.

Alex Darden, partner within EQT Infrastructure’s advisory team, said, “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 organisational, operational and digital technology initiatives that will enhance Covanta’s ability to provide sustainable solutions to growing waste challenges.”

Michael Ranger, Covanta president and CEO, said, “Our comprehensive analysis during the past nine months has been singularly focused on enhancing value for our shareholders.

“EQT certainly recognises the value we see in our business and represents an excellent outcome of our strategic review.

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