Clean Harbors (CLH) – Get Clean Harbors, Inc. Report on Friday completed its acquisition of HydroChemPSC, a leading U.S. provider of industrial cleaning, specialty maintenance and utilities services from an affiliate of Littlejohn & Co.
Clean Harbors purchased HydroChemPSC for $1.25 billion in an all-cash transaction, according to a company statement. The acquisition was financed through a combination of existing cash and proceeds from Clean Harbors’ new $1 billion incremental term loan financing that was completed in conjunction with the transaction. The 2021 incremental term loans were issued at a rate of Libor plus 2% and are due in 2028.
“HPC is an established leader in industrial services, with proprietary technology and a dedicated manufacturing center to fabricate its own tools,” Alan S. McKim, Chief Executive Officer of Clean Harbors, said in the company statement. “The addition of HPC’s experienced team, considerable assets and customer base create significant strategic benefits to Clean Harbors beyond just expanding the size and scale of our operations.”
The Norwell, Mass., environmental and industrial services company expects to achieve cost synergies of $40 million from the acquisition after the first full year of operations, through eliminating redundant corporate expenses and capturing efficiencies in customer service, transportation, branch network, asset rentals, vehicle and tank refurbishment, subcontracting and procurement.
“We expect HPC’s automation and hands-free technology capabilities to drive improvements in safety, and the acquisition to create multiple cross-selling opportunities that will drive incremental waste into our network,” Mckim said. “We welcome HPC’s talented team of employees to Clean Harbors and look forward to a smooth integration. We remain confident that this transaction will greatly enhance shareholder value in the years ahead and will support our growth momentum in 2022 and beyond.”
For 2021, as a standalone company, HydroChemPSC estimated that it would generate revenues of approximately $744 million and adjusted Ebitda of approximately $115 million.
With more than 5,000 employees and 240 service locations throughout the country, Houston-based HydroChemPSC serves a broad range of end markets including refining, chemical and utilities.
HydroChemPSC was created in a 2017 when PSC acquired all of the outstanding ownership interests of HydroChem.
Shares of Clean Harbors on Friday closed at $106.54, down 0.63% in the regular session.