Synagro Technologies Inc., a biosolids-management company owned by Carlyle Group LP (CG:US), sought bankruptcy protection with a plan to sell most of its assets to private-equity firm EQT Infrastructure II LP.
The Baltimore-based company listed assets of more than $10 million and debt of more than $100 million in Chapter 11 papers filed today in U.S. Bankruptcy Court in Wilmington, Delaware.
“Operating results for the company are actually very good, it’s just levered up too much on the balance sheet,” Chief Executive Officer Eric Zimmer said in an interview. The best way to address the debt is through Chapter 11, he said.
EQT, based in Sweden, agreed to be the lead bidder at a court-supervised auction with an offer of about $455 million. The bid may be topped at auction and any sale requires court approval. Washington-based Carlyle, the world’s second-biggest private-equity firm by assets, acquired Synagro in 2007 for $462 million plus the assumption of $310 million in debt.
Synagro, which treats water and wastewater for municipal and industrial customers, contacted more than 100 potential buyers and EQT offered the highest price, Zimmer said. Revenue was $320 million last year, he said. 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. The company will operate as usual while in bankruptcy.
Synagro’s largest unsecured creditors listed in court papers include U.S. Bank, as administrative agent for second- lien lenders owed $100.4 million; Waste Management Inc., owed $583,663; and Automotive Rentals Inc., owed $583,198.
The case is In re Synagro Technologies Inc., 13-11041, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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