Fairfield, N.J.-based Covanta Holding Corp. has reached an agreement with Chicago-based Veolia Environmental Services North America Corp. to purchase most of Veolia's waste-to-energy (WTE) business for $450 million in cash.
The deal, which Covanta says will close by the end of the year, includes seven WTE facilities located in California, Florida, New York, Pennsylvania and Canada. Combined, the facilities process 3 million tons of waste per year and each includes a long-term operating contract with the respective municipal client.
“We are extremely pleased to announce this acquisition which is consistent with our growth strategy targeting energy-from-waste development projects and acquisitions in key markets,” said Anthony Orlando, president and CEO of Covanta, in a press release. “We look forward to welcoming new customers and employees into the Covanta family and working closely with each client community to build on and improve the service provided.”
Covanta currently operates 38 plants that process about 17 million tons of solid waste a year. In announcing the deal, the company said it expected to gain greater efficiency and operational expertise, and stated that it does not foresee forced reductions at the acquired facilities, which employ about 500 people. The acquisition will add about $60 million of operating cash flow during 2010.