Covanta Holding (CVA) is an American waste and energy solutions provider. The company takes waste from businesses and municipalities and converts it into energy. It operates more than 40 facilities in North America and Europe, taking in 21 million tons of waste annually and converting it to renewable electricity to power more than a million homes.
Let’s take a look at the company’s latest financial performance, corporate updates, and newly added risk factors. (See Covanta Holding stock charts on TipRanks).
Q2 Financial Results
Covanta reported revenue of $506 million for Q2 2021, compared to $454 million in the same quarter last year. It posted a loss per share of $0.14, compared to a loss per share of $0.10 in the same quarter last year.
Corporate Updates
Covanta plans to distribute a quarterly cash dividend of $0.08 per share on October 15. Shareholders of record on October 7 will be eligible for the dividend.
Covanta has agreed to be acquired by EQT Infrastructure for $20.25 per share. EQT is a global investment group focused on sustainable growth. It has more than 67 billion euros in assets under management. Covanta and EQT expect to close the merger transaction in Q4 2021.
Risk Factors
The new TipRanks Risk Factors tool shows that Covanta has added 10 new risk factors since June 2021, bringing its total risk factors to 57. All of the newly added risk factors relate to Covanta’s pending acquisition by EQT.
Covanta tells investors that the terms of its agreement with EQT limit its ability to pursue an alternative deal that might offer better compensation to its shareholders. For example, if Covanta decides to ditch the agreement with EQT in favor of an alternative deal, it may need to pay $81.3 million in termination fees to EQT. The company says that condition may discourage a third party from coming up to acquire it.
Covanta says that failure to close the deal with EQT could have a material adverse impact on its business and finances. The company says it will incur significant costs in areas such as advisory fees and printing expenses if the EQT deal is not completed.
Additionally, the agreement with EQT prohibits Covanta from taking certain decisions before the acquisition is completed. It means that Covanta may be forced to forgo certain business opportunities, which could be a major setback to its operations if the EQT deal is eventually terminated.
The majority of Covanta’s risk factors fall under Finance and Corporate category, with 40% of the total risks. That is above the sector average of 37%. Covanta’s shares have gained about 53% since the beginning of 2021.
Related News:
Twitter Agrees to Sell MoPub for $1.05B
Understanding Oshkosh’s Newly Added Risk Factors
A Look at Changes in Southwestern Energy’s Risk Factors
