Synagro Reaches Sale Agreement with EQT Infrastructure II; Pursuing Plan to Reduce Leverage and Strengthen Balance Sheet Company Receives Commitment for $30 Million in Additional Financing

Financial Restructuring and Sale to be Implemented Through a Voluntary Chapter 11 Process

Daily Operations Continue as Normal; Customers to See No Disruption in Service

BALTIMORE, April 24, 2013 /PRNewswire/ -- Synagro Technologies, Inc. today announced that it has reached an agreement to sell substantially all of its assets to EQT Infrastructure II, the second fund within the infrastructure investment strategy of EQT, in a transaction valued at $455 million as the culmination of a plan to strengthen its balance sheet and position the Company for strategic growth.  

"EQT brings a tremendous amount of industry knowledge and expertise to the table and believes both in our business and in the future of Synagro," said Eric Zimmer, the Company's President and CEO. "We look forward to working with the EQT team to grow the business by leveraging their strategic support and industry expertise."

In order to complete the sale and deleveraging in a timely and efficient manner, the Company is proposing to implement the sale pursuant to Section 363 of the U.S. Bankruptcy Code. As a result, Synagro and certain of its subsidiaries today filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. Synagro anticipates the sale will be completed in approximately 60 to 90 days.

In connection with the filing, certain existing lenders have committed to provide $30 million of additional capital in the form of debtor-in-possession financing subject to Court approval. The financing, along with the Company's cash flow from operations, will provide ample liquidity to operate the business and meet ongoing obligations to customers, vendors, and employees through the completion of the sale process.

"The sale transaction will provide Synagro with the financial resources and flexibility we need to remain an industry leader, improve the already unparalleled service we provide to our clients across the country, and also grow our business," Mr. Zimmer said. "Over the past 15 months we have made significant progress in improving operational efficiencies throughout the organization, leading to increased year-over-year profitability. This transaction is the culmination of our ongoing efforts to strengthen our balance sheet to match our stable and strong operating results and to provide the financial stability needed to grow the business."

Synagro will continue all operations as usual throughout the Chapter 11 process, supporting its more than 600 customer locations across North America that rely on Synagro's industry leading biosolids management solutions to support their daily operations. Vendors will be paid for all goods and services rendered subsequent to the date of the filing. Additionally, under the sale agreement, all outstanding trade liabilities will be assumed once the proposed sale closes.

While included as part of the sale of assets, Synagro's special purpose entities, which include its facilities in Philadelphia, Baltimore, and Sacramento, were not included in the Chapter 11 filing.

Synagro is being advised by the law firm of Skadden Arps Slate Meagher & Flom, along with financial adviser AlixPartners and investment bankers Evercore Partners.

For more information about today's announcement, please visit www.SYNAGRO.com/restructuring.

About Synagro

Founded in 1986, Synagro provides a system of solutions for civic and commercial organizations that manages by-products to create new, environmentally compelling options. The Company's reliable, lasting system transforms industrial and municipal waste into environmentally sustainable resources that benefit our communities and our planet—before an environmental footprint is left behind. As the largest recycler of organic by-products in the United States, Synagro uses best-in-class processes from beneficial reuse to renewable energy that adhere to the strictest of environmental regulations to provide sustainable solutions for communities across the nation. Serving more than 600 municipal and industrial water and wastewater facilities throughout the U.S., the Company's leading systems of by-product management services help municipalities of all sizes save money and meet environmental regulations.

About EQT and its Affiliates

EQT is the leading private equity group in Northern Europe with over EUR 20 billion in raised capital and multiple investment strategies. Together with an extensive network of independent Industrial Advisors, EQT implements its investment strategy by acquiring or financing high-quality, medium-sized to large companies in the United States, Northern and Eastern Europe, and Asia, developing them into leading companies. Development is achieved by applying an industrial approach with focus on growth. Since inception, EQT has invested more than EUR 11 billion in around 100 companies and exited approximately 60. EQT-owned companies have more than 550,000 employees.

EQT's first infrastructure fund, EQT Infrastructure, successfully closed on approximately EUR 1.2 billion of committed capital in November 2008. EQT Infrastructure II is the second fund within the infrastructure investment strategy. EQT Infrastructure II seeks to invest in medium-sized infrastructure businesses in the Nordic region, parts of Continental Europe, and North America. Investment targets are regulated infrastructure, concession-based infrastructure, market-based infrastructure and infrastructure-related services. EQT Infrastructure II closed in January 2013 at its hard cap of EUR 1.925 billion of commitments available for investments.

EQT Partners, acting as Investment Advisor to the general partners and managers of each EQT fund, has around 120 investment professionals with an extensive industrial and financial expertise. EQT Partners and its affiliates have offices in Copenhagen, Frankfurt, Helsinki, Hong Kong, Oslo, London, Munich, New York, Shanghai, Singapore, Stockholm, Warsaw and Zurich.

SOURCE Synagro Technologies, Inc.



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