Synagro reports sale, bankruptcy filings
Synagro Technologies, Inc. today announced that it has reached an agreement to sell substantially all of its assets to EQT Infrastructure II, the second fund within the infrastructure investment strategy of EQT, in a transaction valued at $455 million as the culmination of a plan to strengthen its balance sheet and position the company for strategic growth.
In order to complete the sale and deleveraging in a timely and efficient manner, the company is proposing to implement the sale pursuant to Section 363 of the U.S. Bankruptcy Code. As a result, Synagro and certain of its subsidiaries today filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. Synagro anticipates the sale will be completed in approximately 60 to 90 days.
In connection with the filing, certain existing lenders have committed to provide $30 million of additional capital in the form of debtor-in-possession financing subject to Court approval. Synagro said the financing, along with the company’s cash flow from operations, will provide ample liquidity to operate the business and meet ongoing obligations to customers, vendors, and employees through the completion of the sale process.
Synagro will continue all operations as usual throughout the Chapter 11 process, supporting its more than 600 customer locations across North America that rely on Synagro’s biosolids management solutions to support their daily operations. It said vendors will be paid for all goods and services rendered subsequent to the date of the filing. Additionally, under the sale agreement, all outstanding trade liabilities will be assumed once the proposed sale closes.
While included as part of the sale of assets, Synagro’s special purpose entities, which include its facilities in Philadelphia, Baltimore, and Sacramento, were not included in the Chapter 11 filing.
Founded in 1986, Synagro says it is the largest recycler of organic by-products in the U.S.
EQT is the leading private equity group in Northern Europe with over E 20 billion in raised capital and multiple investment strategies.