Kinderhook Industries has agreed to sell its portfolio company Circon Holdings to Covanta Holding, a portfolio company of EQT Partners.
EQT acquired Covanta through its fifth infrastructure-focused fund in December 2021 for $5.3 billion and the buy of Circon is the company’s eighth add-on acquisition under EQT ownership.
Covanta specializes in waste management and energy production. Through its 41 waste-to-energy facilities, located in North America and Europe, the company annually converts approximately 22 million tons of waste into 10 million megawatt hours of baseload electricity – enough energy to power one million homes; and its 16 material processing facilities annually process an additional 700,000 tons of waste for both disposal and recycling.
Covanta was founded in 1992 and is headquartered in Morristown, New Jersey. The acquisition of Circon increases its alternative fuels business fivefold and meaningfully expands the company’s operating footprint in the Gulf Coast and Midwest.
“Covanta, with Circon’s new geographies and complementary capabilities, will offer the absolute highest value proposition for customers, with full integration across logistics, field services, processing and disposal,” said Azeez Mohammed, the president and CEO of Covanta. “This acquisition accelerates our flightpath to becoming the premier company for sustainable materials management. With Circon, we are enhancing our carbon-negative solutions and bringing our offerings to the next level.”
Kinderhook formed Circon in June 2019 through the merger of two of its portfolio companies, South Carolina-based STC Industrial (acquired in 2015) and Texas-based Intergulf (acquired in 2017). Later, in 2021, Kinderhook merged two more of its portfolio companies, Ohio-based Chemtron (acquired in 2019) and South Carolina-based KilnDirect (acquired in 2018) into Circon.
Direct add-on acquisitions by Circon include the 2020 buy of Ohio-based VEXOR Technology, and the 2021 buys of Illinois-based Water Integrated Treatment Systems and Texas-based Bealine Environmental.
Today, Circon is a provider of environmental services – transportation, treatment, processing, and disposal – to more than 2,500 hazardous and non-hazardous waste generators through more than 20 waste facilities in the Midwest, Southeast, and Gulf Coast. Circon, led by CEO Frank Iezzi and President Joe Brunetti, has more than 600 employees and is headquartered near Houston in La Porte, Texas.
“The entire Circon team is grateful for the successful partnership with Kinderhook. We are eager to launch into our next phase of growth with Covanta. After all, we were both built on the tenet of sustainability with the goal of minimizing waste and embracing a circular economy through innovative and environmentally conscious services,” said Mr. Iezzi. “We will continue to deliver on these sustainable offerings, now dramatically enhanced with the expanded network, increased operational efficiency, and strong environmental solutions-based innovations from Covanta. This is exactly what will take our waste management services – and the entire industry – to the next level.”
“Kinderhook is thrilled with this outcome for Circon, its employees, and our limited partners,” said Rob Michalik, a managing director at Kinderhook. “Over the course of our partnership, Circon evolved dramatically under the guidance of Frank and Joe. The Circon team’s vision of developing an integrated environmental solutions platform focused on sustainability came to fruition, and we are extremely proud of the result. We thank the entire Circon organization for their hard work, and we wish the team future success under Covanta’s leadership.”
Kinderhook makes control investments in companies with transaction values of $25 million to $150 million in which the firm can achieve financial, operational, and growth improvements. Sectors of interest include healthcare services; environmental and business services; and automotive and light manufacturing. The firm was founded in 2003 and is headquartered in New York City.
EQT invests in medium-sized companies operating in a range of industries in Northern Europe, Eastern Europe, China, and the United States. Sectors of interest include healthcare, industrials, services, and consumer products. The Stockholm, Sweden-based firm was founded in 1994 and has offices in 14 countries across Europe, Asia, and North America.
Brown Gibbons Lang and Houlihan Lokey are the advisors to Circon and Kinderhook on this transaction.
© 2023 Private Equity Professional | April 5, 2023
