(Bloomberg) -- EQT AB has agreed to acquire a majority position in Heritage Environmental Services, a leading provider of industrial waste management solutions.

The Stockholm-headquartered investment firm is gaining control of HES from The Heritage Group via its EQT Infrastructure VI fund, according to a statement Monday that confirmed an earlier Bloomberg News report. Financial terms of the deal weren’t disclosed.

Founded in 1970, HES is the third-largest vertically integrated provider of industrial waste management in the US based on volumes, according to data from the US Environmental Protection Agency. The company, based in Indianapolis, operates 37 facilities and employs nearly 1,600 people across the US.

“HES is a generational platform that has assets that are irreplaceable and which can’t be built,” Juan Diego Vargas, partner at EQT Infrastructure, said in an interview. “Given the significant tailwinds around the onshoring of industrial manufacturing and the US’s ambition to be a leader in the creation of semiconductors, investing in this area will help to unlock incremental industrial production in the US in a way that is environmentally sustainable, particularly for the new energy transition economy.”

EQT’s deal for HES comes at a time when the amount of waste being generated globally is outpacing the number and capacity of facilities able to safely handle disposal. Vargas said there is a waste “backlog” and companies like HES are well positioned for growth.

“With the difficulties to obtain waste handling permits across federal, state and local levels, as well as the associated costs, the last time an asset like HES operates was built was 30 years ago,” Vargas said. “These circumstances create significant barriers to entry, which for EQT is highly attractive as an investor in downside-protected businesses.

EQT Infrastructure has made a string of investments in the environmental services sector. Its portfolio includes energy-from-waste firm Covanta Holding Corp. and battery recycling provider Cirba Solutions in the US, and wastewater manager Saur and property remediation provider Recover in Europe. Realized investments include residuals management solutions provider Synagro, oil management services firm RTI and hazardous waste specialist NORD.

EQT secured the deal for HES after participating in a narrow process, according to Vargas. The investment firm had tracked HES for several years and previously partnered with The Heritage Group on its investment in Cirba. The Heritage Group will continue to remain a shareholder in HES.

Nomura Greentech served as financial adviser and Simpson Thacher & Bartlett provided legal counsel to EQT Infrastructure. Truist Securities and Kirkland & Ellis LLP advised The Heritage Group on the transaction. The transaction is expected to close in the first quarter.

(Updates quote in sixth paragraph, adds detail of EQT deals in seventh paragraph.)

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