Carlyle’s Synagro files for bankruptcy protection

Synagro Technologies, a Baltimore-based waste recycler owned by the Carlyle Group, filed for bankruptcy protection Wednesday, just days after defaulting on its debt.

Carlyle, the D.C.-based private equity giant, borrowed money to take the publicly traded company private in a $772 million deal in 2007.

In the ensuing financial crisis, municipalities slashed spending, which caused a significant decline in Synagro’s revenue.

Synagro chief executive Eric Zimmer said the company has strong profitability, but was not able to grow fast enough to meet its debt obligations.

About a year ago, Zimmer said, “It became clear to all constituents that the best alternative was to look at marketing the company.

“We have marketed the company through a very structured process . . . the result of that has been multiple offers.”

The company was part of Carlyle’s infrastructure fund.

Synagro filed for Chapter 11 bankruptcy protection as it finalized a sale of its assets to EQT Infrastructure II for $455 million.

The bankruptcy filing was not a surprise to Carlyle, which had written off the investment years ago, but it represents a rare misstep for the private equity firm.

A Carlyle spokesman declined to comment.

Zimmer said that Synagro’s involvement in a Detroit municipal scandal three years ago had no bearing on the sale. In that affair, James R. Rosendall Jr., a former official with Synagro, and a Detroit City Council official pleaded guilty to bribery charges in connection with a $1.2 billion contract that Detroit awarded in 2007.

“Detroit was a matter in which the company had an issue up there with a singular employee that was addressed,” Zimmer said. “It has had nothing to do with our financial position today.”

Thomas Heath is a local business reporter and columnist, writing about entrepreneurs and various companies big and small in the Washington Metropolitan area. Previously, he wrote about the business of sports for The Post’s sports section for most of a decade.
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