Highstar winner in bid for Veolia US unit

Highstar Capital has paid $1.9bn for Veolia ES Solid Waste. The deal will help Highstar create a major privately held waste management provider.

Highstar Capital has bought Veolia ES Solid Waste for $1.9 billion, pledging to recombine Veolia into “the largest privately owned environmental service business in the US”.

Veolia ES Solid Waste, purchased from Veolia Environnement, will merge with Highstar portfolio company Advanced Disposal Services, as well as Interstate Waste Services – also a Highstar holding – to produce a “fully-integrated” waste management service “across the eastern United States,” Highstar said.

Highstar, in a statement announcing its purchase of Veolia, said the combined business would operate as Advanced Disposal Services, a 5,450-person company with 3,000 trucks, 47 landfills and 92 stations, headed by current Advanced Disposal chief executive Charlie Appleby.

In acquiring Milwaukee, Wisconsin-headquartered Veolia, Highstar edged out Madison Dearborn Partners as well as Estre Ambiental from Brazil, Infrastructure Investor has learned. Christopher Beall, a partner with Highstar in New York, did not respond to a request for comment.

Highstar bid for Veolia through holding company Star Atlantic Waste, and secured financing from Deutsche Bank, Macquarie Group, UBS and Barclays.

Veolia Environnement unloaded Veolia ES Solid Waste as part of a company-wide effort to reduce debt. Paris-headquartered Veolia sold its UK water business for $1.9 billion recently, and put its transportation unit up for sale in late 2011.

Stock in Veolia Environment rose from $11.26 to $11.49 per share on the New York Stock Exchange Thursday on a Veolia announcement. The company is trading well-below its 52-week high of $26.31.

Highstar, manager to $5.5 billion, was founded by public-private partnership (PPP) maven Christopher H. Lee.