NORWELL, Mass. - Clean Harbors, Inc. (NYSE: NYSE:CLH), a North American leader in environmental and industrial services, has announced a definitive agreement to acquire HEPACO, a provider of specialized environmental and emergency response services. The $400M cash transaction is expected to close in the first half of 2024, subject to regulatory approvals and customary closing conditions.
HEPACO, headquartered in Charlotte, North Carolina, services over 2,000 customers across 17 states with more than 40 regional locations. The acquisition is projected to generate approximately $20M in cost synergies after the first full year of operations for Clean Harbors, equating to a post-synergy acquisition multiple of 7.1 times. HEPACO's estimated full-year 2023 earnings before interest, taxes, depreciation, and amortization (EBITDA) are expected to be around $36M on revenues of $270M.
Eric Gerstenberg, Co-Chief Executive Officer of Clean Harbors, emphasized the strategic fit of the acquisition, noting the enhanced scale and capabilities it will bring to their Environmental Services segment. He highlighted the importance of HEPACO's geographic footprint, trained personnel, and equipment fleet in improving the company's emergency response services.
Mike Battles, Co-Chief Executive Officer of Clean Harbors, pointed out the alignment of the acquisition with their long-term strategic plan, Vision 2027, and emphasized the cultural fit and shared commitment to safety and service excellence between the two companies.
The strategic benefits for Clean Harbors include complementary product offerings, synergy opportunities, expansion of rail and marine service capabilities, and increased cross-selling opportunities, particularly in industrial services and hazardous waste disposal.
HEPACO employs about 1,000 people and operates a fleet of more than 900 vehicles. Robb Schreck, Chief Executive Officer of HEPACO, expressed confidence in the transaction, citing Clean Harbors' leading position and resources, which will provide HEPACO's customers with greater service capabilities and HEPACO employees with enhanced career opportunities.
The acquisition will be funded through available cash and additional debt financing. Legal counsel for Clean Harbors is provided by Davis, Malm & D'Agostine, while financial advisors for HEPACO include Piper Sandler Companies and Houlihan Lokey (NYSE:HLI), Inc., with legal counsel from Kirkland & Ellis LLP and Moore & Van Allen PLLC.
This news is based on a press release statement and does not include any speculative information.
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