NORWELL, Mass .– Clean Harbors, Inc. (“Clean Harbors”) (NYSE: CLH) announced today that it has entered into a definitive agreement to acquire HydroChemPSC (HPC), from a subsidiary of Littlejohn & Co., LLC, for $ 1.25 billion in a transaction entirely in cash. HPC is one of America’s leading providers of industrial cleaning, specialty maintenance, and utility services. The acquisition, which is subject to regulatory approval and other customary closing conditions, is expected to close in 2021.
With more than 240 service points across the country, HPC serves a wide range of end markets, including refining, chemicals and utilities. Its services revolve around providing solutions to clients focused on the cleaning, maintenance and environmental compliance of critical and critical equipment and infrastructure.
“In a company where brand value, customer service and a reputation for safety are important, HPC is a recognized leader with tremendous strengths that will enhance our environmental service capabilities, particularly in areas of higher added value. specialist work and facilities services, ”said Alan S. McKim, Chairman, President and CEO of Clean Harbors. “This acquisition demonstrates our disciplined approach to mergers and acquisitions, which focuses on accretive transactions that create multiple cross-selling opportunities and generate waste in our network. “
HPC expects to generate revenue of approximately $ 744 million in 2021, with full-year adjusted EBITDA of approximately $ 115 million. Clean Harbors estimates that it can realize cost synergies of $ 40 million from the acquisition after the first full year of operation, which would equate to a purchase multiple of 8.1 times on a post-market basis. synergistic. The Company expects to finance the acquisition through a combination of available cash and the issuance of additional debt.
Key strategic benefits
Clean Harbors’ planned acquisition of HPC offers significant strategic benefits, including:
- Brings a talented and experienced management team with a history of growth
- Increases the size, scale and capabilities of industrial and field service operations
- Injects additional volumes of waste into Clean Harbors incinerators, landfills and other waste treatment facilities
- Adds deep customer relationships, including over 180 built-in locations
- Improves the security profile of industrial services with more automation and hands-free technologies
- Generates significant cross-selling opportunities, especially in disposal and emergency response
- Capture important synergies in areas such as customer service, transportation, branch network, asset leasing, vehicle and tank refurbishment, outsourcing and supply
HPC has more than 5,000 employees and operates a large fleet of specialized vehicles and equipment. The fleet consists of more than 5,600 units, including vacuum trucks, wheeled trucks, high pressure water jets and light vehicles. In addition, HPC is the only provider of industrial cleaning and specialty services with a dedicated manufacturing and technology center. HPC’s proprietary technology and ability to manufacture and create custom tools for complex or unique applications gives them a real competitive advantage.
“With its commitment to safety, innovation and environmental compliance, HPC operates on the same principles as Clean Harbors,” said McKim. “This cultural alignment is a big part of what makes this acquisition an exciting acquisition for us and why we look forward to adding their talented team of employees.”
Brad Clark, President and CEO of HydroChemPSC, said: “As a leading provider of environmental and industrial services, Clean Harbors is the ideal buyer for HPC. Through this transaction, our organization has access to significant resources, a broader range of offerings, and the largest network of licensed disposal and recycling assets in North America. We are confident that this combination will bring significant benefit to our customers while enriching career opportunities for HPC employees. “
“One of the many reasons we were drawn to HPC is its differentiated technology, which provides safe, highly effective and more cost effective cleaning and specialty solutions,” McKim said. “HPC is the industry leader in hands-free technology and automation for industrial services. Part of our ESG efforts have focused on the safety of our employees and customers. The acquisition of HPC is another important step in this direction.
McKim concluded: “We are confident that this transaction will create substantial shareholder value in the years to come. HPC’s specialized services and technological leadership position will allow us to get closer to our customers and improve our environmental services business. The operational, productivity and sales synergies are broad and achievable. We have built a business model that generates strong cash flow, allowing us to continually reinvest and grow our business. Given its track record, HPC is only expected to improve this generation of cash flow in the future. “
Goldman Sachs is acting as financial advisor to Clean Harbors and providing a $ 1.0 billion debt commitment for the transaction. Davis, Malm & D’Agostine is legal counsel for Clean Harbors. For HydroChemPSC, Moelis & Company acts as financial advisor and Troutman Pepper Hamilton Sanders as legal advisor.
About Clean Harbors
Clean Harbors (NYSE: CLH) is North America’s leading provider of environmental and industrial services. The Company serves a diverse customer base, the majority of which are Fortune 500 companies. Its customer base spans a number of industries, including chemicals, energy and manufacturing, as well as numerous government agencies. These customers rely on Clean Harbors to provide a wide range of services such as end-to-end hazardous waste management, emergency spill response, industrial cleaning and maintenance, and recycling services. Through its subsidiary Safety-Kleen, Clean Harbors is also the largest refiner and recycler of used oil in North America and a leading supplier of parts washers and environmental services to commercial, industrial and automotive customers. Founded in 1980 and based in Massachusetts, Clean Harbors operates in the United States, Canada, Mexico, Puerto Rico and India. For more information, visit www.cleanharbors.com.