Covanta To Acquire Veolia’s North American Waste-to-Energy Portfolio

Covanta Holding Corporation has signed a definitive agreement to acquire most of Veolia Environmental Services North America’s its North American waste-to-energy business. The transaction is expected to be accretive to Covanta. The purchase price of US $450 million, less net debt and minority interests (subject to certain other adjustments) will be paid in cash.

The operations to be acquired consist of the following:

Facility Location Capacity
Long Beach California 1380 TPD

Dade

Florida 3000 TPD
Dutchess New York 450 TPD
Islip New York 486 TPD
Montgomery Pennsylvania 1200 TPD
York Pennsylvania 1344 TPD
Vancouver Canada 800 TPD

 

 

 

 

 

 

 

Each of the seven waste-to-energy businesses to be acquired includes a long-term operating contract with the respective municipal client. In addition, the company said that it plans to acquire a majority ownership stake in Veolia’s Montgomery facility and a related transfer station operating contract.

Collectively, these seven waste-to-energy facilities process approximately 3 million tons of waste per year. The acquired businesses compliment Covanta’s existing portfolio, which includes operation of 38 waste-to-energy facilities that process approximately 17 million tons of municipal solid waste annually.

Workforce reductions are not anticipated at the operating facilities, which employ approximately 500 people. This acquisition is expected to add approximately $60 million of operating cash flow during 2010.

The company expects the entire transaction will close by year end. However, the closing of the transaction may occur in stages and is conditioned upon receipt of customary regulatory and other approvals or consents. The failure to obtain certain approvals or consents may result in the removal of certain businesses from the transaction and a related price reduction.

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