Dive Brief:

• Swedish investor EQT Infrastructure plans to sell a 25% stake in waste-to-energy firm Reworld to GIC, manager of Singapore's sovereign wealth fund. The deal is an expansion of GIC's existing minority stake, according to a Wednesday release.
• Reworld recently rebranded from Covanta as part of a "strategic evolution" to grow its environmental services and sustainable materials management services, CEO Azeez Mohammed explained in April. The latest deal will provide additional resources, expertise and capital, per the release.
• "With the combined support of EQT and GIC, we are in an excellent position to accelerate the growth of our innovative waste solutions, amplify our zero-waste initiatives, decrease reliance on landfills, and contribute to a more sustainable and resilient future for everyone," Mohammed said in a statement.

Dive Insight:

Reworld has diversified its services in recent years, entering the hazardous waste business through its acquisition of Circon in 2023, for instance. The company has made at least eight deals since the start of 2023.

Those moves come as municipal solid waste incinerators face community opposition in certain regions, making organic growth for companies like Reworld challenging. Reworld operates the last WTE facility in California, while it operated another facility in that state until it closed earlier this year. The company is keeping its options open in other states, though, earning a contract to build a new, $550 million facility for Pasco County, Florida.

EQT Infrastructure took Covanta private in a $5.3 billion deal in 2021. As part of the deal, EQT set the company on an ambitious growth path, including a goal to increase waste recycled or reused by 25% by 2025. EQT also brought in Mohammed as CEO to facilitate the company’s next steps.

Since then, the company now known as Reworld has used M&A to grow its holdings. The company has “nearly doubled” the number of its operational facilities to more than 100, according to Wednesday’s release, and its headcount has increased by about 800. Reworld reports it manages 20 million tons of waste for more than 4,600 customers today.

Reworld is expected to continue its growth following the deal with GIC. JD Vargas, a partner within EQT Infrastructure’s advisory team, said the company is poised to take advantage of declining landfill capacity in some of its core regions. GIC representatives said they were eager realize that growth.

“As a long-term investor, the expansion of our partnership with Reworld reflects the significant potential for more sustainable alternatives to waste disposal, an essential service for all communities,” Ang Eng Seng, chief investment officer of infrastructure at GIC, said in a statement.

GIC will obtain a combination of primary and secondary capital in the deal, which is expected to close in the first quarter of 2025. EQT will remain the majority owner after the transaction closes.