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Green Energy Alert: Covanta Buys Veolia Ops

Stocks in this article: CVA VE

Solar and wind companies might get the splashy headlines in the renewable energy space, but companies that burn trash to make a living just keep trucking along too.

And today, Covanta (CVA), which operates 38 energy-from-waste facilities, said it reached a deal to buy nearly all of the EfW operations from the North American unit of Veolia Environment (VE).

According to a press release, the Fairfield, New Jersey-based Covanta said it will pay, in all, $450 million in cash for facilities in California, Florida, New York, Pennsylvania and Vancouver. On an annual basis, the seven facilities produce 3 million tons of waste.

According to the release, the deal is expected to be accretive to Covanta and will also add around $60 million in operating cash flow next year. Covanta, which also said that it doesn't expect to cut jobs at the sites, anticipates the entire deal to close by the end of the year, though that timeline may be dictated by regulatory hurdles and other approvals.

"We are extremely pleased to announce this acquisition, which is consistent with our growth strategy targeting Energy-from-Waste development projects and acquisitions in key markets," Covanta President and CEO Anthony Orlando said. "We look forward to welcoming new customers and employees into the Covanta family and working closely with each client community to build on and improve the service provided."

In May, Covanta priced a $400 million private offering .

After surging briefly, shares of Covanta were down 1.2% in the morning following the announcement. Veolia was also changing hands in the red, down 0.7%.

Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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