$1.25 Billion Transaction Will Broaden Clean Harbors Waste Treatment
Capabilities and Drive Significant Waste Volumes into Its Disposal
Network; Company to Hold Conference Call Today at 9:00 a.m. ET
NORWELL, Mass.--(BUSINESS WIRE)--Oct. 29, 2012--
Clean
Harbors, Inc. (“Clean Harbors”) (NYSE:CLH), the leading provider of
environmental, energy and industrial services throughout North America,
today announced it has signed a definitive agreement to acquire
Safety-Kleen, Inc. (“Safety-Kleen”), 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.
Based on the current operating and anticipated future performance of
Safety-Kleen, Clean Harbors expects the acquisition will be immediately
accretive, excluding one-time fees and acquisition-related expenses. The
Company has received a financing commitment from Goldman Sachs Bank USA,
but is currently considering several financing options for the
transaction that may include a combination of existing cash, debt and
equity.
The transaction will enable Clean Harbors to:
-
Penetrate the small quantity waste generator market
-
Broaden its waste treatment capabilities to include re-refining waste
oil and expanded solvent recycling capabilities
-
Drive substantial increase in waste volumes into its existing waste
disposal treatment network
-
Capitalize on the growing demand for recycled products including
re-refined oil
-
Enhance its commitment to sustainability
-
Leverage the combined sales forces to maximize cross-selling
opportunities
-
Add an immediately accretive business to accelerate growth
-
Leverage operating efficiencies through the combined company
-
Add to its strong 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.
Davis, Malm & D'Agostine served as legal counsel to Clean Harbors.
Credit Suisse served as lead financial advisor to Safety-Kleen. Morgan
Stanley and Houlihan Lokey provided additional financial advisory
support. Skadden, Arps, Slate, Meagher & Flom served as legal counsel to
Safety-Kleen.
Third-Quarter Results
Clean Harbors will be announcing its third-quarter results on its
regularly scheduled date, which as previously announced will be
Wednesday, November 7. There will be no update on its quarterly
financial results provided in conjunction with today’s announcement.
Conference Call Information
Management will hold a conference call today to discuss the Safety-Kleen
transaction at 9:00 a.m. ET. Those who wish to listen to the webcast of
the call and view the accompanying slides should visit the Investor
Relations section of the Company’s website at www.cleanharbors.com.
The live call also can be accessed by dialing 201.689.8881 or
877.709.8155 prior to the start of the call. If you are unable to listen
to the live call, the webcast will be archived on the Company’s website.
About Safety-Kleen
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 that keep North American businesses in balance with the
environment. Safety-Kleen is owned by a group of investors including
Highland Capital Management, L.P. of Dallas, Texas, its largest
investor. For more information about the company, please visit www.safety-kleen.com.
About Clean Harbors
Clean
Harbors is the 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. For more information, visit www.cleanharbors.com.
Safe Harbor Statement
Any statements contained herein that are not historical facts are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are
generally identifiable by use of the words “believes,” “expects,”
“intends,” “anticipates,” “plans to,” “estimates,” “projects,” or
similar expressions. Such statements may include, but are not limited
to, statements about the Company’s ability to close its proposed
acquisition of Safety-Kleen, its ability to raise the capital necessary
to complete the transaction, expected synergies from the transaction,
and other statements that are not historical facts. Such statements are
based upon the beliefs and expectations of Clean Harbors’ management as
of this date only and are subject to certain risks and uncertainties
that could cause actual results to differ materially, including, without
limitation, those items identified as “risk factors” in the Company’s
most recently filed Form 10-K and Form 10-Q. Therefore, readers are
cautioned not to place undue reliance on these forward-looking
statements. The Company undertakes no obligation to revise or publicly
release the results of any revision to these forward-looking statements
other than through its various filings with the Securities and Exchange
Commission, which may be viewed in the “Investors” section of the
Company’s website at www.cleanharbors.com.
Source: Clean Harbors, Inc.
Clean Harbors, Inc.
James M. Rutledge, 781-792-5100
Vice
Chairman, President and Chief Operating Officer
InvestorRelations@cleanharbors.com
or
Sharon
Merrill Associates
Jim Buckley, 617-542-5300
Executive Vice
President
clh@investorrelations.com
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