EQT Infrastructure has agreed to acquire Covanta, a US-based publicly listed owner and operator of waste-to-energy facilities, for $5.3bn in an all-cash deal.

As per the terms of the transaction, EQT Infrastructure will pay $20.25 per share to Covanta’s shareholders. The consideration includes the debt of the sustainable waste and energy solutions provider.

Based in Morristown, New Jersey, Covanta has 41 waste-to-energy facilities located in important metropolitan regions in the US, Canada, and Europe.

The facilities convert nearly 21 million tons of waste annually, which is collected from municipalities and businesses.

The waste is converted into 10TWh of clean, renewable electricity, which can meet the power consumption needs of one million homes.

Covanta’s waste-to-energy facilities of the company are said to help offset 21 million tons of greenhouse emissions annually.

The company also recycles 600,000 tons of metal from the collected waste.

Covanta president and CEO Michael Ranger said: “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 represents an excellent outcome of our strategic review.

“Furthermore, as an organisation 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.”

Covanta has approximately 4,000 full time employees. The company’s EBITDA for 2021 is expected to be $460m-$480m.

It operates through three business segments, which include waste processing and services, energy production, and metals recycling.

EQT said that its purpose-driven investment model offers various growth opportunities for Covanta. The investment organisation said that it will provide capital and operational support to the waste-to-energy company for driving compelling results for all stakeholders.

EQT Infrastructure partner Alex Darden 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.”

The transaction will be contingent on customary conditions and approvals and is expected to be finalised by the end of this year.