Clean Harbors to acquire Safety-Kleen
$1.25 billion transaction to broaden waste treatment
Clean Harbors, Inc., a leading provider of environmental, energy and industrial services throughout North America, announced at the end of October (2012) that the company has signed a definitive agreement to acquire Safety-Kleen, Inc., the largest re-refiner and recycler of used oil in North America and a leading provider of parts cleaning and environmental services.
Under the terms of the agreement, Clean Harbors will purchase Safety-Kleen in an all-cash transaction valued at $1.25 billion. The acquisition is subject to approval by U.S. and Canadian regulators, as well as other customary closing conditions. The transaction is expected to be completed by year-end.
Clean Harbors says the transaction will enable them to penetrate the small quantity waste generator market and broaden its waste treatment capabilities to include re-refining waste oil and expanded solvent recycling capabilities. The deal is also expected to drive substantial increase in waste volumes into the company's existing waste disposal treatment network, and allow Clean Harbours to capitalize on the growing demand for recycled products including re-refined oil, as well as enhance its commitment to sustainability while adding to its cash flow generation.
“This acquisition is a landmark achievement for Clean Harbors that we believe will build significant long-term value for our shareholders,” said Alan S. McKim, Chairman and Chief Executive Officer.
“Safety-Kleen is a recognized leader in the environmental services field with a corporate heritage that dates back nearly 50 years with a strong service culture. We have the benefit of a long and positive relationship with Safety-Kleen as a result of our acquisition of its Chemical Services Division a decade ago. Safety-Kleen has been a large customer of our environmental services business. The addition of its entire organization aligns perfectly with our acquisition strategy of expanding our Environmental Services business in North America. Safety-Kleen is the largest collector of waste from the small quantity generator market and the leader in re-refining used oil in North America.”
“Adding Safety-Kleen’s re-refining and recycling capabilities to our current offerings will enhance the sustainability options available to our existing customers and significantly broaden the range of services we can offer customers of both companies,” McKim said.
“Safety-Kleen services over 200,000 customer locations, and we envision substantial cross-selling opportunities with its extensive customer base. These Safety-Kleen customers will now have direct access to our industry-leading network of disposal facilities.”
Bob Craycraft, Safety-Kleen’s President and CEO, said, “We believe this transaction represents an opportunity to combine two truly dynamic organizations. Clean Harbors’ history of innovation and commitment to sustainability mirrors our philosophy of delivering our customers the latest in re-refining, recycling and hazardous waste management, as we continually upgrade the environmental services we offer. Safety-Kleen’s talented group of employees are joining an exceptional, well-managed company with a track record of success. At the same time, Safety-Kleen’s customers will benefit from access to Clean Harbors’ expansive suite of environmental, energy and industrial services.”
With more than 200 locations throughout North America, Safety-Kleen services commercial and industrial customers in the U.S., Canada and Puerto Rico. Safety-Kleen currently employs approximately 4,200 employees and operates a sizeable service fleet of more than 2,300 vehicles and 1,000 rail cars. Safety-Kleen’s portfolio of assets include the largest oil re-refinery in the world at its East Chicago, Indiana location and the largest re-refinery in Canada at its Breslau, Ontario location. Currently, the company collects approximately 200 million gallons of used oil annually, the majority of which it returns to the marketplace as reusable motor oil. In 2011, Safety-Kleen managed hazardous and non-hazardous waste volumes equivalent to approximately 680,000 55-gallon drums. Safety-Kleen generated revenues of $1.3 billion and adjusted EBITDA of $161 million in 2011.
McKim said, “Safety-Kleen’s professional approach toward compliance, health and safety excellence, and commitment to customer service is closely aligned with Clean Harbors’ devotion to those very same principles. Safety-Kleen is led by a first-class management team and we are excited to work together with Bob and his team to complete this merger. We are confident that working together we can capture substantial synergies between our two organizations and the significant upside potential of the combined company.”
“Looking ahead, our focus will be on gaining the necessary approvals, planning our integration and completing the acquisition by year-end. We appreciate the strength and intrinsic value of the Safety-Kleen brand. Therefore, we intend to maintain its brand going forward and operate its network of branch locations as a subsidiary. We look forward to welcoming Safety-Kleen’s employees into the Clean Harbors family. This transformative merger of two great companies will further reinforce our position as the premier provider of environmental, energy and industrial services in North America,” McKim concluded.
Safety-Kleen is a leading North American used oil recycling and re-refining, parts cleaning and environmental solutions company, with approximately 4,200 employees serving more than 200,000 customer locations in the United States, Canada and Puerto Rico. Safety-Kleen provides a broad set of environmentally-responsible products and services designed to keep North American businesses in balance with the environment.
Clean Harbors is a leading provider of environmental, energy and industrial services throughout North America. The Company serves more than 60,000 customers, including a majority of the Fortune 500 companies, thousands of smaller private entities and numerous federal, state, provincial and local governmental agencies. Headquartered in Norwell, Massachusetts, Clean Harbors has more than 200 locations, including over 50 waste management facilities, throughout North America in 38 U.S. states, seven Canadian provinces, Mexico and Puerto Rico.