EQT Infrastructure has agreed to acquire all the shares of New York Stock Exchange-listed Covanta in a $5.3bn deal, including debt, to bolster its portfolio in sustainable businesses.
The buyout price of $20.25 per share represents a 36% premium of its share price of $14.86 on June 8, the day prior to initial media speculation of a transaction. The company’s share prices has risen 34% to $19.91 per share since then.
EQT reached a €12.5bn first close for its latest mega infrastructure fundraise in March, with eyes on its €15bn hard cap.
Fund V is expected to be up to 55% invested following the Covanta deal, the firm said.
Covanta converts waste into renewable electricity with operating facilities in North America, Europe and the UK. The firm said EQT will enhance the company’s portfolio of assets, its long-term community relationships and other growth opportunities including a robust UK project pipeline.
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 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.”
This is EQT’s second deal within the renewable energy space in a month. The firm agreed to acquire renewable energy platform Cypress Creek Renewables from HPS Investment Partners and Temasek through its Infrastructure V fund earlier in the month.
The firm also tapped the vehicle in April for a $4.6bn buyout of North American transport assets from FirstGroup. Infrastructure V is expected to be 35% to 40% invested after the two deals.
EQT hauled in €15.6bn in April for its ninth flagship fundraise, beating even its hard cap after successfully navigating the Covid-affected capital raising market.
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