Waste Recycler Synagro Will File for Bankruptcy TodayDawn McCarty
Waste recycler Synagro Technologies Inc., which was purchased by Carlyle Group LP in 2007, plans to file for bankruptcy today, Chief Executive Officer Eric Zimmer said. The company plans to sell most of its assets to EQT Infrastructure II.
“Operating results for the company are actually very good, it’s just levered up too much on the balance sheet,” Zimmer said in an interview. The best way to address its debt is through Chapter 11, he said.
EQT, the Sweden-based private equity firm which has agreed to be the lead bidder at a court-supervised auction, offered a total of about $455 million. The sale is subject to court approval, as well as better offers.
Carlyle Group, the world’s second-biggest private-equity firm by assets, acquired Synagro for $462 million in 2007. Carlyle bought all of Synagro’s shares for $5.76 each in cash, a 29 percent premium over the closing price on Jan. 26, 2007, the Washington-based firm said in a Jan. 29, 2007, statement. The transaction including the assumption of $310 million in debt was valued at $772 million.
Synagro, which serves municipal and industrial water and wastewater treatment customers, contacted more than 100 potential buyers and EQT offered the highest price, Zimmer said. The company competes in an $8 billion market and had revenue of $320 million in 2012, he said. Its customers include the cities of New York, Houston, Baltimore and Honolulu, according to its website.
“Everything that we are doing right now has one overriding goal and that is to make Synagro a stronger company now and for years to come,” Zimmer said.