Mergers & acquisitions

Harsco acquires Clean Earth Inc.

Harsco Corp., based in Camp Hill, Pennsylvania, recently announced it plans to acquire Clean Earth Inc. from Compass Group Diversified Holdings of Westport, Connecticut, for $625 million in cash, subject to post-closing adjustments.

Headquartered in Hatboro, Pennsylvania, Clean Earth is one of the largest specialty waste processing companies in the U.S., providing processing and recycling for construction and demolition (C&D) debris, hazardous wastes, contaminated materials and other special wastes. Harsco provides industrial services and engineered products that serve large industries, including steel, railways and energy, in more than 35 countries.

Clean Earth analyzes, treats, documents and recycles waste streams generated across many diverse end markets in the infrastructure, industrial, commercial and institutional sectors. Clean Earth is the largest operator in the contaminated materials and dredged material management market, Harsco says in a news release, operating 27 permitted facilities in the U.S. The company currently maintains a portfolio of more than 200 permits with a 100 percent permit renewal success rate to date, Harsco says.

Clean Earth is expected to generate a 2019 revenue of about $300 million.

With the addition of Clean Earth, Harsco says it will gain entry into the environmental services markets. Clean Earth will expand Harsco’s portfolio with a diverse range of customized environmental services and solutions. Harsco says it also intends to grow within the industrial waste sector outside of the U.S. over time.

“Harsco has been strategically transforming its portfolio with a goal towards value creation. The highly strategic and complementary acquisition of Clean Earth, the addition of ALTEK Group in May 2018, and the exit of certain businesses together bring us closer to realizing our vision of becoming a global market leader and provider of environmental solutions to a variety of industries,” says Harsco Chairman and CEO Nick Grasberger. “This acquisition is expected to create significant strategic and financial benefits for our shareholders and customers, including higher margin and recurring revenues, cost savings and potential cross-selling opportunities beyond what either company could achieve on its own. Clean Earth brings a proven management team and talented employees with a strong track record of growth and environmental and safety performance.”

The transaction is expected to generate earnings in 2020, the first full year of ownership.

The acquisition will be an all cash transaction. Harsco says it expects to finance the acquisition with a combination of borrowings under its revolving credit facility and new debt financing. Harsco has obtained committed debt financing, subject to customary conditions, for this transaction from Goldman Sachs Bank USA and Citigroup Global Markets Inc. Harsco says it intends to file a Current Report on Form 8-K with the Securities and Exchange Commission, which will have further details concerning the transaction.

The transaction is expected to close in the next few months, subject to customary closing conditions, including regulatory approval, Harsco says.