Morristown-based Covanta to be acquired by EQT for $5.3 billion, but will maintain presence in N.J.

Morristown-based Covanta Holding Corporation, a world leader in sustainable waste and energy solutions, announced Wednesday that it has entered into a definitive agreement to be acquired by EQT Infrastructure for $5.3 billion.

Shareholders will receive $ 20.25 in cash per share of Covanta’s common stock – meaning the transaction is valued at $5.3 billion, including the assumption of Covanta’s net debt obligations. The purchase price represents a 37 percent premium to Covanta’s unaffected share price of $14.86 on June 8, the day prior to initial media speculation of a transaction.

The acquisition is subject to Covanta shareholder approval, as well as customary government approvals, and is expected to close in the fourth quarter of this year. The agreement resulted from a competitive sale process and is not subject to a financing condition.

Covanta CEO Michael Ranger said he was thrilled to make the announcement. 

“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,” he said. 

“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.”

EQT describes itself as a purpose-driven global investment organization with more than EUR 67 billion in assets under management across 26 active funds. EQT funds have portfolio companies in Europe, Asia-Pacific and the Americas with total sales of approximately EUR 29 billion and more than 175,000 employees. EQT works with portfolio companies to achieve sustainable growth, operational excellence and market leadership.

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

Following the completion of the acquisition, EQT officials said they 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.