EQT Infrastructure backs Danish waste group

The Scandinavian private equity group has agreed to pay €35m to acquire a specialist in hazardous waste treatment in the Danish town of Nyborg.

EQT Infrastructure has sealed a deal for Kommunekemi, a waste management company in Denmark. Owners The Local Government Denmark (LGDK) and the municipalities of Copenhagen and Frederiksberg agreed to an enterprise value of  DKK 260 million (€35m) for the company. EQT is acquiring the company’s entire share capital.

Kommunekemi specialises in safe treatment of hazardous waste that could damage the environment. Its plant in Nyborg is Europe’s single largest facility of its kind, with three incineration lines and a total capacity of around 185,000 tons of waste processed per year, according to a press statement.

EQT Infrastructure, whose parent company EQT Partners is headquartered in Stockholm, is financing the purchase with equity from its €1.2 billion fund. 65 percent of the consideration will be equity, while the remaining 35 percent will be in the form of bank loans provided by Nordea Bank Danmark and arranged by Nordea Debt Capital Markets.

Under the business plan for Kommunekemi, EQT expects to own the business for five to seven years, and to see revenue growth on the back of new investment in the company’s technology. Expansion into markets outside of Denmark is also part of the strategy.

Kommunekemi currently provides the municipality of Nyborg with around 90 percent of its heating. The electricity it produces is sold on the open market.

Erik Fabrin, the chairman of LGDK, said in a press release: “We have, after a thorough process, come to the conclusion that EQT Infrastructure will be the best possible owner to take Kommunekemi to the next level both with regards to continued development of the already leading quality plant, but also to grow Kommunekemi internationally.”