Bloomberg News

Synagro Wins Court Approval of Auction Process, EQT Ups Bid (1)

May 13, 2013

Synagro Technologies Inc., a biosolids-management company, won court approval of procedures that will govern the sale of virtually all its assets at an auction next month, according to a company spokesman.

U.S. Bankruptcy Judge Brendan Linehan Shannon granted the company permission to hold a June 10 auction, with a $460 million lead offer from private-equity firm EQT Infrastructure II LP, at a hearing today in Wilmington, Delaware, spokesman Tom Becker said in an e-mail.

“We’re pleased to move forward with this process and look forward to closing a transaction that will maximize value for our stakeholders and strengthen Synagro,” Becker, with Sitrick and Co., said in an e-mail.

The deadline for other potential buyers to make competing offers was set for June 3, according to court papers. The company will seek court approval to sell its assets to EQT or any other auction winner at a hearing scheduled for June 20.

Synagro filed for bankruptcy protection last month following several renewable-energy companies into court protection as they struggled in recent years to turn their environmentally friendly energy initiatives into profits.

Failed Companies

Alternative-energy companies that have failed since September 2011, some of whom received government financing to support their growth, include Solyndra LLC, A123 Systems Inc. (AONEQ:US), Ener1 Inc., Beacon Power Corp. (BCONQ:US) and Abound Solar Inc.

Electric-car maker Coda Holdings Inc. filed for bankruptcy this month and Fisker Automotive Inc., which fired about 75 percent of its staff this year, missed its first payment on $193 million it had drawn down on a $529 million Energy Department loan.

Synagro serves more than 600 municipal and industrial water and wastewater facilities and is the largest recycler of organic byproducts in the U.S., it said in a statement. The company processes waste to produce environmentally friendly products including fertilizer and fuels. The company was founded in 1986, and has 800 employees in 34 states from Connecticut to California, according to its website.

Washington-based Carlyle Group LP (CG:US), 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.

EQT, based in Sweden, agreed to be the lead bidder at a court-supervised auction with an original offer of about $455 million.

Synagro and the investment firm agreed to amend its purchase agreement to resolve an objection from creditor American Securities Opportunities Advisors LLC, according to court documents. EQT increased the offer by $5 million, with an additional $3.5 million payment 60 days after closing if it wins the auction and modified the circumstances under which it would receive break-up and expense reimbursement fees of about $13.8 million.

The case is In re In re Synagro Technologies Inc.13-11041, U.S. Bankruptcy Court, District of Delaware (Wilmington).

To contact the reporter on this story: Michael Bathon in Wilmington at mbathon@bloomberg.net

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net.


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