Harsco’s roots date back to 1853 when a group of entrepreneurs formed the Harrisburg Car Manufacturing Company to help produce rail cars for the burgeoning railroad industry. Over the next 167 years, Harsco’s business mix would consistently evolve with a focus on industrial products and services in industries such as steel, construction, energy and rail.
It was this diverse business mix that Nick Grasberger identified as part of the company’s problem when he was hired in 2013 as its CFO. According to Grasberger, who became president and CEO a year later, Harsco needed to sharpen its operational focus, and environmental services was where the opportunities were. So, despite Harsco’s Metals & Minerals business being the only division providing environmental services at the time he joined the company, Grasberger made the strategic decision in 2018 to go all in to transform the company into a “single-thesis company focused on providing environmental solutions on a global basis.”
Today, the company’s Metals & Minerals business (recently rebranded as Harsco Environmental), is now a more than $1 billion global market processor and recycler of industrial, retail and health care waste streams.
Out with the old
Unifying Harsco’s corporate vision wasn’t a seamless task. According to Grasberger, before the company could streamline operations, there was a lot of internal division that needed to be sorted out.
“Prior to my arrival, there had been four CEOs in five years,” he says. “They were caretakers who never committed to the company. Without leadership, it is really hard to establish a culture. Additionally, each leader in each division had established a zone of influence, so to speak, and this further eroded the corporate culture. I have worked hard to establish a strong corporate culture built on what we call our ‘Harsco Values.’ These values include Employee Care, Passion for Winning, Satisfy the Customer, Inclusion, Integrity and Respect.”
Grasberger says that after he took over, the company required those who wanted to stay to buy in to the company’s new culture by drawing a line in the sand, making embracing these new values nonnegotiable.
“It became very clear, very quickly, to those who had been with the company for several years that we were moving to another culture and they had to figure out whether they were cut out for our new culture,” he says. “This was a top-down approach, no doubt, and our employees came to understand what my nature was, what my expectations were and that I was going to work really hard to reinforce these values of what was acceptable and what was not.”
Along with instituting a new set of values across the company, Grasberger says that he simultaneously began rebuilding the company’s executive leadership team. He says rather than focus on executives who had specific expertise in areas such as finance, legal, HR or communications, he wanted broad-minded individuals who could focus on various areas of the business and cross the aisle to help when needed.
Grasberger says that since becoming CEO, his nine direct reports are all new, and their fresh perspectives have helped jumpstart the company and drive its growth and transformation.
While the challenges of overhauling the company were daunting, Grasberger notes that the opportunity to reenvision Harsco was one that he embraced.
“I was attracted to Harsco by the challenge of fixing an industrial company with an impressive history, but one that had lost its way,” he says. “The management team, culture, strategy and business system each needed to be addressed. Earlier in my career, I was hired as the CFO of Kennametal Inc., which was in a similar situation, and I came to realize that I was well-suited for turnarounds. Up to the time I joined Harsco, that was the most rewarding role in my career—to get a company back on a path to success. When I became CEO at Harsco, my initial priorities were to build a management team and culture based on a new set of values. I also realized we needed to fix or sell the existing businesses before we could further transform the portfolio.”
Grasberger says Harsco made the decision to shed its energy businesses through divestiture two years ago to allow the company to prioritize making inroads in the environmental services market.
With the company aligned philosophically, Grasberger set his sights on pushing Harsco to take the next step in its evolution
Getting in the game
In May 2018, Harsco announced a $60 million acquisition of ALTEK Group, a UK-based manufacturer of products that enable aluminum producers and recyclers to manage and extract value from waste streams and reduce waste generation. Then, in June 2019, the company announced the acquisition of Clean Earth for $625 million. Clean Earth is one of the largest specialty waste processing companies in the U.S., providing processing and beneficial reuse solutions for hazardous and non-hazardous wastes, contaminated materials and dredged volumes. In April, the company completed its trio of acquisitions when it announced it had acquired the Environmental Solutions business (ESOL) from Stericycle Inc. for $462.5 million. ESOL specializes in environmental and regulated waste management and provides a range of hazardous waste solutions to customers across the industrial, retail and health care industries.
While the ALTEK deal signaled the company’s intention to invest in its environmental services offerings, the Clean Earth and ESOL deals removed all doubt as to the degree of the company’s commitment.
“Early in 2019, we felt our foundation was sufficiently strong enough to take the next big step in our transformation. … Our analysis concluded that Clean Earth would be the perfect first step due to its financial profile and the ability to scale the business quickly both organically and through additional acquisitions. We had also identified the Stericycle Environmental Solutions business as one that would fit well with Clean Earth and would likely become available within a year,” Grasberger explains.
Grasberger says the network of assets, as well as the 3,300 new employees, derived from the Clean Earth and ESOL acquisitions helped catapult the company to become a global leader in the environmental services sector within the span of 10 months.
“Clean Earth is a leader in the hazardous waste market and is the largest operator in the contaminated materials and dredged material management market, operating 27 permitted facilities in the U.S.,” he says. “The company currently maintains a portfolio of more than 200 scarce and difficult-to-replicate permits with a 100 percent permit renewal success rate to date. With the addition of Clean Earth, Harsco gained entry into adjacent, high-margin environmental services markets with significant regulatory barriers to entry. In addition, Clean Earth expanded Harsco’s portfolio with an innovative and diverse range of customized environmental services and solutions. Relying on its global operating platform, Harsco also intends to grow within the industrial waste sector outside of the U.S. over time.
“The ESOL business … operates a valuable network of 13 federally permitted treatment, storage and disposal facilities (TSDFs) and 48 10-day transfer facilities. With a fleet of more than 700 vehicles, the business serves more than 90,000 customer locations with 450,000 service stops annually, collecting, receiving and processing more than 500,000 tons of waste a year.”
Additionally, Grasberger says combining ESOL with Clean Earth expands the company’s geographic portfolio across the U.S. to create a national hazardous waste processing platform; broadens the company’s customer relationships across industries; expands the company’s exposure through a large logistics fleet; provides opportunities for operational improvements, cost synergies and revenue growth; and creates an attractive value proposition for the company’s employees and shareholders.
Grasberger noted following the ESOL deal that Clean Earth and ESOL were in the process of being integrated into a single business operating under the Clean Earth name, and that the revenue from this Clean Earth segment will likely exceed that of Harsco Environmental within a few years.
This integration, he notes, makes sense in the long term for the company from both a financial and ESG perspective.
“This is not just about needing a single thesis as a business,” he says. “It is about doing the right thing for our people and planet. By focusing on the urgent societal needs of providing environmental solutions for industrial and specialty waste streams, we are determined to make a tangible difference for our customers and employees while making our earth cleaner.”
Grasberger says that in the year since Clean Earth was acquired, more than 80 percent of the company’s revenue now comes from environmental solutions business, compared to just 60 percent less than three years ago. He notes that the company’s goal is to ultimately derive over 90 percent of Harsco’s annual revenue from environmental products and services.
A unified front
After a whirlwind couple of years, Grasberger says Harsco is “hitting the pause button” before jumping back into the M&A market as the company works to integrate its Clean Earth and ESOL business, but he does not think “Clean Earth will be a complete business without some tack-on M&A at some point in the future.”
With Harsco aligned both strategically and philosophically, Grasberger says that the company is ready to focus on meshing its offerings to offer the best possible service to its growing network of customers.
“With a national network of locations, Clean Earth is uniquely positioned to solve our customers’ highly regulated business challenges under one roof. We will be able to simplify waste management for our customers by serving as a one-stop shop to ensure the safe and compliant disposal of all their hazardous and non-hazardous waste,” he says. “It is really challenging for our customers to recycle, reuse or safely dispose of tough-to-treat, and often hazardous, materials. By solving this problem for them, our customers can focus on their own businesses. If we make it simple enough, our business will grow, and importantly, more waste will find its way to sustainable outlets.”
This article originally appeared in the Sept. issue of Waste Today. The author is the editor of Waste Today magazine and can be reached at firstname.lastname@example.org.