Enviva files for Chapter 11 to implement RSAs

BY Fraser Tennant

Aiming to reduce its debt by approximately $1bn, wood-based biomass producer Enviva Inc. has filed for Chapter 11 bankruptcy so that it may implement two restructuring support agreements (RSAs) with its creditors.

The RSAs have broad support across the company’s capital structure and are designed to improve profitability, strengthen liquidity and better position the business for long-term success as the world’s largest producer of industrial wood pellets.

The restructuring is targeted to be completed during the fourth quarter of 2024.

Enviva has also secured commitments for $500m in debtor-in-possession (DIP) financing and other financing accommodations, a portion of which will be allocated by the company to eligible stockholders in accordance with a syndication process that is subject to court approval.

The DIP facility is expected to provide, subject to court approval, sufficient liquidity to support continued operations across Enviva’s business throughout the restructuring process.

“These agreements represent a significant milestone in the ongoing process to transform our business, as we focus on improving profitability, reducing costs, enhancing asset productivity and optimising our capital structure,” said Glenn Nunziata, interim chief executive and chief financial officer at Enviva. “We look forward to emerging from this process as a stronger company with a solid financial foundation and better positioned to be a leader in the future growth of the wood-based biomass industry.”

The world’s largest producer of industrial wood pellets, Enviva owns and operates 10 plants with annual production of approximately 5 million metric tonnes in Virginia, North Carolina, South Carolina, Georgia, Florida and Mississippi, and is constructing its 11th plant in Epes, Alabama.

The company sells most of its wood pellets to customers located primarily in the UK, the European Union and Japan, helping to accelerate the energy transition away from conventional energy sources and reduce greenhouse gas emissions on a lifecycle basis in hard to abate sectors such as steel, cement, lime, chemicals and aviation.

Enviva expects to continue to pay suppliers in the ordinary course for authorised goods received and services provided after the Chapter 11 filing.

Mr Nunziata concluded: “We appreciate the support of our lenders, vendors and customers, and the tremendous efforts of our entire team as we continue to execute our transformation plan.”

News: Enviva announces Restructuring Agreements amid Chapter 11 proceedings

EQT to acquire Equitrans Midstream Corp in all-stock deal

BY Richard Summerfield

EQT Corporation and Equitrans Midstream Corporation have announced a merger agreement which will create a natural gas business with an initial enterprise value over $35bn.

The deal will see leading US natural gas producer EQT acquire its former pipeline unit in an all-stock transaction that values Equitrans at around $14bn including debt.

Under the terms of the deal, each outstanding share of Equitrans common stock will be exchanged for 0.3504 shares of EQT, giving the deal an equity value of about $5.5bn. The deal is expected to close in the Q4 2023. Upon completion, EQT shareholders will own about 74 percent of the combined company and Equitrans shareholders will own the rest.

The transaction will help in facilitating lower-cost production and transportation of natural gas by adding more than 2000 miles of pipeline infrastructure, the companies said on Monday. Equitrans was spun out from EQT in 2018 when the midstream operations were separated from the gas production business.

“Equitrans is the most strategic and transformational transaction EQT has ever pursued, and we see this as a once in a lifetime opportunity to vertically integrate one of the highest quality natural gas resource bases anywhere in the world,” said Toby Z. Rice, president and chief executive of EQT. “As we enter the global era of natural gas, it is imperative for US natural gas companies to evolve their business models to compete on the global stage against vertically integrated rivals.

“We have identified multiple, high confidence near-term synergies, with significant upside from future infrastructure optimization projects that we believe will drive material value creation for shareholders over time,” he continued. “Our modern, data-driven operating model, first-hand knowledge of Equitrans' operations and successful track record integrating $9 billion of acquisitions, all of which included midstream assets, gives me tremendous confidence in EQT's ability to seamlessly combine the two companies and capture synergies.”

“This strategic transaction with EQT is the culmination of an exhaustive process conducted by the ETRN board to determine the best strategic path forward for our shareholders, employees, and stakeholders,” said Thomas F. Karam, executive chairman of Equitrans Midstream. “Combining with EQT creates a premier vertically integrated natural gas business that is a game changer for the natural gas industry and Appalachian Basin. The transaction delivers full and fair value to ETRN shareholders and provides the opportunity to participate in future value growth as EQT executes on its strategy. We are proud of our employees who have worked hard to build one of the leading midstream companies in the Appalachian Basin. And we are excited for the future with EQT.”

News: EQT to Buy Mountain Valley Pipeline Owner for $5.5 Billion

Viavi to acquire Spirent Communications for $1.28bn

BY Richard Summerfield

US technology specialist Viavi Solutions has agreed to acquire the UK telecoms testing group Spirent Communications for $1.28bn.

Under the terms of the deal, Spirent shareholders will receive175 pence per share, which includes a special dividend of 2.5 pence per Spirent share in place of any final dividend for the year ended 31 December 2023. The price represents a premium of about 61.4 percent to Spirent’s closing price on 4 March, the last day of trading before the deal was announced.

The deal is expected to close during the second half of 2024, subject to shareholder approvals and other customary closing conditions, including Spirent shareholder approval and certain regulatory closing approvals. Those Spirent directors who hold shares in the company have signed irrevocable agreements in support of the deal.

The transaction will be funded by Viavi’s existing cash, an $800m loan from Wells Fargo and a $400m investment in Viavi by US private equity group Silver Lake. The acquisition will boost Viavi’s artificial intelligence, 5G and cloud-native innovation. According to a statement announcing the deal, operational efficiencies are anticipated to result in annual run-rate cost synergies of up to $75m two years after completion of the transaction.

“The Spirent Board intends to unanimously recommend this all-cash offer, which not only represents an attractive outcome for Spirent Shareholders, but also provides a significant opportunity for employees, customers and other stakeholders through what is a highly strategic and highly complementary combination,” said Sir Bill Thomas, chairman of Spirent. “With its strong management team, global scale and the cultural alignment between our businesses, we are confident that in VIAVI, we have found the right owner to take Spirent on to the next phase of its growth story.”

“Combining with VIAVI brings together a highly complementary product offering which can be marketed globally,” said Eric Updyke, chief executive of Spirent. “It will enable Spirent to build on the strategic progress we have made to date, with a partner that has the scale and resources to capitalize on the long-term growth opportunities ahead. The combination of VIAVI and Spirent creates a stronger business that will be better able to compete, and we are confident in the opportunities this will bring for our stakeholders.”

“Combining our leading communications test and measurement and optical technologies and Spirent’s high-performance testing and assurance solutions is expected to deliver enhanced product solutions and applications, accelerate growth in new markets and strengthen innovation through expanded engineering and design capabilities,” said Oleg Khaykin, president and chief executive of VIAVI. “Further, we are uniting two teams with a shared passion for developing compelling and cutting-edge offerings for customers and a commitment to technological excellence. We are pleased to welcome a strategic, long-term investment from Silver Lake in connection with the Acquisition. Silver Lake has an outstanding track record of supporting leading technology companies through both organic growth investments and scale acquisitions.”

News: US-based Viavi to buy UK's Spirent Communications for $1.28 bln

IGT and Everi combine in $6.2bn gaming deal

BY Fraser Tennant

In a combination that creates a global gaming and FinTech enterprise, International Game Technology (IGT) and Everi Holdings Inc. are to merge in a deal that values the combined businesses at approximately $6.2bn.

Under the terms of the agreement, the transaction will be executed through a series of steps pursuant to which IGT will spin off a subsidiary owning its Global Gaming and PlayDigital businesses to IGT shareholders.

That entity will then combine with Everi, with IGT shareholders receiving shares of Everi common stock and Everi continuing as the parent company. IGT shareholders will receive approximately 103.4 million Everi shares, resulting in an approximate 54 percent ownership interest in the combined company, with existing Everi stockholders owning the balance.

Following the closing of the transaction, Everi will change its name to International Game Technology, Inc. and will trade on the New York Stock Exchange under the ticker IGT.

“We are bringing together two businesses with complementary strengths that are stronger and more valuable together,” said Vince Sadusky, chief executive of IGT. “The combination results in a comprehensive and diverse product offering, addressing more aspects of the gaming ecosystem across land-based gaming, iGaming, sports betting and FinTech.”

The transaction has been approved unanimously by all voting members of the IGT board of directors and the Everi board of directors. 

“We expect the combined company will deliver a comprehensive range of products and services that will engage gaming patrons and drive efficiencies and revenues to our customers,” said Michael Rumbolz, executive chairman of Everi.

Subject to receipt of regulatory approvals, the approval of Everi stockholders and IGT shareholders, and satisfaction of other customary closing conditions, the transaction is expected to close in late 2024 or early 2025.

Mr Sadusky concluded: “The creation of separate gaming and lottery companies, each with experienced management teams and simplified business models, better positions each company to service customers and create significant value for stakeholders.“

News: International Game Technology to split lottery business from gaming unit

MedTech provider Agiliti goes private in $2.5n deal

BY Fraser Tennant

In a deal that takes the US MedTech provider private, Agiliti Inc. is to be acquired by its majority owner, private equity firm THL Partners, for approximately $2.5bn.  

Under the terms of the definitive agreement, THL will acquire all outstanding shares of Agiliti common stock not currently owned by THL and its affiliates and certain management shareholders for $10 per share in cash.

Upon completion of the transaction, Agiliti will become a private company and will no longer be publicly listed or traded on the New York Stock Exchange.

“Agiliti serves a critical role in sustaining our national healthcare infrastructure, and our dedicated team has led the way to our substantial growth and evolution over the last decade,” said Tom Leonard, chief executive of Agiliti. “We are pleased to expand our five-year partnership with THL in a transaction that provides immediate value and liquidity to our shareholders, while lifting certain overhangs that had limited our performance in the public market since the time of our initial public offering.”

An essential service provider to the US healthcare industry with solutions that help support a more efficient, safe and sustainable healthcare delivery system, Agiliti serves more than 10,000 national, regional and local acute care and alternate site providers across the US.

For more than eight decades, Agiliti has delivered medical equipment management and service solutions that help healthcare providers reduce costs, increase operating efficiencies and support optimal patient outcomes.

Acting upon the unanimous recommendation of a special committee of the Agiliti board of directors, the Agiliti board of directors approved the transaction. The transaction has also been approved by THL Agiliti LLC in its capacity as the majority shareholder of Agiliti and no other shareholder approval is required.

Serving as exclusive financial adviser to the special committee is Centerview Partners, with Weil, Gotshal & Manges acting as legal counsel. Goldman Sachs & Co. is providing exclusive financial advisory services to THL, with legal counsel from Ropes & Gray.

The transaction is expected to close in the first half of 2024, subject to customary closing conditions.

News: Healthcare tech Agiliti to be taken private in $2.5 bln deal