Clean Harbors to Acquire Safety-Kleen for $1.25 Billion
Clean Harbors (Norwell, MA) is buying Safety-Kleen Inc. (Plano, TX) for $1.25 billion. "This acquisition is a landmark achievement for Clean Harbors that we believe will build significant long-term value for our shareholders," said Clean Harbors CEO Alan S. McKim. The deal combines Safety-Kleen's oil recycling and industrial parts cleaning business with Clean Harbors' more diversified environmental, energy and industrial services that will broaden its offerings and ability to meet customers' sustainability goals. Clean Harbors has a long history with Safety-Kleen, including its purchase of Safety-Kleen's chemical services division in 2002. In 2010 Safety-Kleen rejected an offer from Clean Harbors to buy them for $718 million. In recent years Safety-Kleen has been a customer of Clean Harbors', and to some extent a competitor as well. In August, Safety-Kleen filed for a $400 million initial public offering which was later postponed due to unfavorable market conditions. At the time, some believed it was meant to showcase the company for a possible sale. Dallas-based Highland Capital Management is the largest shareholder with 20 million shares or 39.3 percent of the company...Read More »
Waste Management Q3 Hurt by Restructuring Charges and Lower Recycled Commodity Prices
Waste Management Inc. (Houston, TX) said third quarter profit fell 21 percent largely as a result of $0.08 per share restructuring charge and $0.01 related to a labor dispute. Net income dropped to $214 million, or $0.46 per share, from $272 million, or $0.58 per share, in the same quarter last year. Revenue slipped by 2 percent to $3.46 billion from $3.52 billion last year, hurt by falling recycled commodity prices, which were 40% lower than last year translating into a $176 million impact, and 4 percent lower revenue at its waste-to-energy operations. Net income would have been $0.61 per share without after-tax charges of $32 million, or $0.07 per share, related to organizational restructuring and a labor union dispute, and $39 million, or $0.08 per share, from impairments of investments in unconsolidated entities and related assets.
On the bright side, revenue from waste collection and disposal operations increased $115 million or 3.3 percent and internal collection and disposal revenue growth was 0.8 percent. The company also held course on core price increases of 2.6 percent, exclusive of fuel surcharges, that was consistent with the first half of 2012. The company said it expects its full-year earnings to total between $2.15 and $2.20 per share...Read More »
Republic Services to Restructure Operations and Eliminate Jobs
Republic Services, Inc. (Phoenix, AZ) is restructuring its operations that will reduce its regional offices from four to three and area offices from 28 to 20 resulting in job cuts at all levels. The company expects to incur a $30 million charge, half of which will be recorded in the fourth quarter. After that, the restructuring will yield annual savings of $23 million. CEO Don Slager said "We implemented this realignment to leverage our strong leadership team and organizational capabilities to refine how we operate. We have not made any changes to the span of control at our business units, keeping the appropriate leadership focus and decision making closest to our customers."
Republic is not alone in its belt-tightening. Waste Management (Houston, TX) in July announced an ambitious restructuring plan to consolidate geographic groups and corporate structure that will ultimately eliminate 700 jobs (1.5 percent of its workforce). In August Casella Waste Systems (Rutland, VT) said it plans to cut expenses by $6.5 million per year by realigning operations and reducing its workforce...Read More »
Waste Connections Completes $1.3 Billion Purchase of R360
Waste Connections, Inc. (The Woodlands, TX) said it has completed its purchase of R360 Environmental Solutions Inc. (Houston, TX), an oilfield treatment and disposal services company, for $1.3 billion in cash. The deal is expected to increase Waste Connections' revenue run rate by about 28% and to add approximately 400 basis points to its consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA). R360, which was formed two years ago from the merger of several smaller companies, operates 26 facilities (11 landfills) that provide waste treatment, recycling, and disposal services across Louisiana, New Mexico, North Dakota, Oklahoma, Texas and Wyoming, and has annualized revenue of about $300 million.
In a conference call with investors, Waste Connections CEO Ron Mittelstaedt noted that while the acquisition represents a slight departure from the company's core business, the prospects for growth are significant. He said that domestic drilling for oil and gas is expected to increase 30 percent and production to increase 50 percent. More stringent environmental regulations will direct more of those wastes to companies like R360 for proper processing and disposal. The highly fragmented nature of that business, which is estimated to be between $2 billion and $2.5 billion, implies future acquisition opportunities that will ultimately improve market share and operating margins...Read More »
States Ask EPA to Craft Guidance on Coal Ash Disposal and Reuse Risks
At a recent meeting in Washington DC, state waste officials began asking EPA to craft guidance on how to determine whether coal ash is safe for landfill disposal or beneficial reuse. Attendees at the Association of State and Territorial Solid Waste Management Officials' (ASTSWMO) annual meeting said they see inconsistencies among the states about how to determine the environmental risks of coal ash, particularly with unencapsulated disposal, such as using it as fill in mines or disposing it in landfills.
EPA has proposed to regulate disposal of ash as either hazardous waste or solid waste, but recently said it will need a least a year to review and take comment on recent data and unresolved concerns over the rulemaking. As part of the RCRA rule development, EPA is also working on a risk assessment for the beneficial uses of coal ash to assess the risks of reusing the ash in products...Read More »
Progressive Waste Q3 Profit Hurt by Lower Recycled Commodity Pricing
Progressive Waste Solutions (Toronto, ON) said lower recycled commodity prices hurt revenue and earnings in the third quarter. Adjusted net income declined to $32.1 million, or $0.28 per share from $35.1 million, or $0.29 per share reported for the same period last year. Revenue declined slightly by 0.7 percent to $487.20 million from $490.5 million last year. Despite a $12.4 million decline attributable to lower recycled commodity prices, revenue would have increased by 2.5 percent on the weight of 1.6 percent core price increases and two recent acquisitions. Consequently, the company reaffirmed its previous guidance for the year of earning between $0.99 and $1.00 per share...Read More »
US Ecology Fires CEO Despite Record Third Quarter
Just as US Ecology, Inc. (Boise, ID) announced record third quarter profits, its board surprised investors with the termination of CEO James R. Baumgardner. The hazardous and waste management company elevated Jeffrey R. Feeler, previously CFO and treasurer, to acting president and chief operating officer. The company has not disclosed the reason for the change, although some analysts speculate that it may have to do with internal politics or disagreements over the pace of acquisitions.
Nonetheless, third quarter profit grew to $8.7 million, or $0.47 per share from $3.7 million, or $0.20 per share last year. Revenue climbed 15 percent to $45.7 million from $39.7 million in the same quarter last year. Higher transportation revenue and disposal pricing more than offset a 7 percent decline in disposal volume...Read More »
Covanta Energy on Track to Open $272 Million Ontario Plant in 2014
Covanta Energy (Morristown, NJ) recently held a media "hard hat" tour of its waste-to-energy facility now under construction in Clarington, Ontario. The company says the $272-million facility is on schedule for completion in early 2014. Once operaing, the plant will convert 140,000 tons of post-recycled waste per year into 17.5 megawatts of electricity that will serve between 12,000 and 14,000 homes. Covanta claims the facility will be the cleanest and most efficient of its kind in North America and will go a long way to helping the Durham Region achieve its diversion goal of 70 percent. Durham made a commitment in 1999 not to open any new landfills in the region...Read More »
Oshkosh Profits Up, Especially its Waste Equipment Segment
Specialty truck maker Oshkosh Corp. reported a 35 percent jump in commercial vehicle sales during its fiscal fourth quarter and a 55 percent increase in sales of refuse collection vehicles compared with the same quarter last year. And, while profit in all segments was higher, total revenue declined by 2.3 percent to $2.06 billion as lower defense segment revenues outweighed double-digit increases in all non-defense sales. The company is currently fending off attempts by activist shareholder Carl Icahn to gain more control. He is the company's largest shareholder and earlier this month launched an unsolicited offer to buy all shares he does not already own and to nominate a slate of friends to the board. Last week, Oshkosh's board rejected Icahn's bid to buy the company for about $2.8 billion, or $32.50 a share...Read More »
Advanced Disposal Expands to Tennessee with Purchase of Big Landfill
Advanced Disposal Services, Inc. (Jacksonville, FL) is making its second foray into Tennessee with its purchase of Eco-Safe Systems, LLC. Eco-Safe a large newly permitted landfill in Blountville, which is in the northeastern part of the state that borders with Virginia to the North and North Carolina to the east. The company expects the landfill to accept 800 tons per day of waste from Northeast North Carolina, Southern Virginia and Eastern Tennessee, including the city of Kingsport. "We're excited to expand operations in to Tennessee and provide a vital infrastructure for the cities, counties and third-party haulers who will use Eco-Safe Landfill for the safe and proper disposal of waste," said Gerald Allen, vice president - landfills for Advanced Disposal.
The expansion into Tennessee begins to bridge the gap between Advanced Disposal's markets to the south and those of newly integrated sister company Interstate Waste in the Northeast and the newly acquired US operations of Veolia in the Midwest, including Kentucky to the north. Advanced Disposal, a unit of Highstar Capital, bought Veolia's US operations for $1.91 billion in a deal struck last July...Read More »
Progressive Waste Opens High Btu Landfill Gas Plant in Texas
Progressive Waste Solutions (Toronto, ON) in partnership with Morrow Renewables, LLC (Midland, TX), has opened a new high Btu landfill gas (LFG) plant at its Turkey Creek Landfill in Alvarado, TX. The plant is expected to capture 1,300 cubic feet per minute of gas from the landfill for conversion in pipeline-quality high-Btu gas. Morrow Renewables has another high Btu LFG-to-pipeline project in the works in Fort Bend, TX that is due to open in early 2013...Read More »
INEOS Bio Facility in Florida Begins Producing Power
INEOS New Plant Energy LLC (Vero Beach, FL) has begun producing power at its $130 million biorefinery in Indian River County, FL that will ultimately produce 8 million gallons per year of ethanol and generate 6 MW of renewable power from local organic and household wastes once it begins full operation, including bioethanol production later this year.
INEOS New Planet Energy is a joint venture of California's New Planet Energy and the global chemical giant INEOS, based in the United Kingdom...Read More »
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