Waste Management Inc. (NYSE: WM) has agreed to sell power producer Wheelabrator Technologies Inc. (WTI) to an affiliate of Energy Capital Partners (ECP) for $1.94bn in cash.
Wheelabrator owns or operates 17 waste-to-energy facilities and four independent power facilities in the U.S. that process over 7.5 million tons of waste and have a combined generating capacity of 853 MW. It also has four ash monofill landfills, three transfer stations and an ongoing development and construction project in the United Kingdom.
In conjunction with the sale, Waste Management will enter into a long-term agreement to supply waste to certain WTI facilities upon closing.
“This transaction aligns with our goal of driving shareholder value by maximizing our focus on our core business and reducing earnings volatility related to electricity sales,” said David Steiner, President and CEO of Waste Management. “We look forward to a long-term partnership with ECP through our waste supply agreement.”
“ECP is excited about our acquisition of Wheelabrator given its excellent operating track record of critical assets, and talented and entrepreneurial employees,” said Tyler Reeder, a Partner in Energy Capital Partners. “We believe Waste Management’s strong waste supply capabilities well complement ECP’s deep experience in power generation; and we look forward to continuing to provide Wheelabrator customers and partners with the same continued excellent service they have enjoyed under Waste Management’s ownership.”
The transaction is subject to Federal Energy Regulatory Commission (FERC) approval and other customary closing conditions, and is expected to close in late 2014.
Waste Management, based in Houston, Texas, is the leading provider of comprehensive waste management services in North America.
Energy Capital Partners is an energy-focused, private-equity firm with over $13bn in capital commitments. The firm is focused on investing in the power generation, midstream oil and gas, environmental infrastructure, renewable energy, electric transmission, and energy services sectors of North America’s energy industry.