Waste Management, Inc. (NYSE:WM) has agreed to sell Wheelabrator Technologies, Inc. (“WTI”) to an affiliate of Energy Capital Partners (“ECP”) for $1.94 billion in cash.

Wheelabrator owns or operates 17 waste-to-energy facilities and four independent power producing facilities in the United States that process over 7.5 million tons of waste and generate more than 660 megawatts of electricity, as well as an ongoing development and construction project in the United Kingdom. During 2013, WTI generated approximately $845 million in total revenue.

In conjunction with the sale, Waste Management will enter into a long-term agreement to supply waste to certain WTI facilities upon closing.

“The transaction aligns with our goal of driving shareholder value by maximizing our focus on our core business and reducing earnings volatility related to electricity sales,” said David Steiner, Chief Executive Officer and President of Waste Management. “We look forward to a long-term partnership with ECP through our waste supply agreement.”

Steiner continued, “We appreciate the hard work and dedication of the Wheelabrator employees. They made our waste-to-energy business successful, and we anticipate that the business will continue to be successful under ECP’s ownership.”

“ECP is excited about our acquisition of Wheelabrator given its excellent operating capabilities, critical assets, and talented and entrepreneurial employees.” said Tyler Reeder, a Partner at Energy Capital Partners. “We believe Waste Management’s strong waste supply capabilities well complement ECP’s deep experience in power generation; and we look forward to continuing to provide Wheelabrator customers and partners with the same excellent service they have enjoyed under

Waste Management’s ownership.” Waste Management intends to use the net proceeds from the transaction to drive incremental shareholder value, by acquiring assets related to the core solid waste business, paying down debt necessary to maintain a strong balance sheet, and repurchasing shares.

The transaction is subject to Federal Energy Regulatory Commission (FERC) approval and other customary closing conditions, and is expected to close in late 2014.

Waste Management intends to provide more information on the transaction and address any questions related to the transaction on its upcoming second quarter earnings call to be held on July 29th.

Barclays and Centerview Partners served as financial advisors to Waste Management on this transaction.