Mergers & Acquisitions

Departments - Industry News

September 4, 2019

Harsco acquires Clean Earth Inc.

© Natee Meepian |

Harsco Corp., based in Camp Hill, Pennsylvania, has acquired Clean Earth Inc. from Compass Group Diversified Holdings of Westport, Connecticut, for $625 million.

The transaction, first announced in May, closed June 28.

Headquartered in Hatboro, Pennsylvania, Clean Earth is one of the largest specialty waste processing companies in the U.S., providing processing and recycling of hazardous wastes, contaminated materials and other special wastes. Harsco provides industrial services and engineered products that serve large industries, including steel and railways, 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 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. 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, Harsco says.

In 2019, Clean Earth is expected to generate approximately $300 million of revenue and about $65 million of adjusted EBITDA.

With the addition of Clean Earth, Harsco says it will gain entry into the environmental services markets. 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 be accretive to earnings in 2020, the first full year of ownership.

The acquisition was an all-cash transaction. Harsco obtained committed debt financing 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.

Houlihan Lokey, based in Los Angeles, served as financial adviser to Clean Earth. Houlihan Lokey says the transaction highlights its focus on advising companies in the specialty waste sector and follows its success of advising Clean Earth on its sale to Compass Group Diversified Holdings in 2014.

J.F. Lehman acquires Lone Star Disposal

J.F. Lehman & Company (JFLCO), a New York City-based middle-market private equity firm focused exclusively on the aerospace, defense, maritime, government and environmental sectors, announced Aug. 14 that an investment affiliate has acquired Lone Star Disposal, Delta Waste Services and Tanner Road Facility.

Lone Star is a vertically integrated provider of construction and demolition (C&D) and municipal solid waste (MSW) disposal and related environmental services in Houston. The company’s comprehensive service platform utilizes an asset base consisting of a C&D landfill, an MSW transfer station, a C&D recycling facility and a C&D collection fleet. The company’s diversified customer base includes regional and nationwide C&D and MSW haulers and C&D contractors serving the greater Houston metropolitan area.

“Lone Star represents an excellent addition to our portfolio of companies in the environmental services sector,” says JFLCO partner Glenn Shor. “Lone Star’s industry-leading reputation, vertically integrated service offering and strategically located asset base reflect core characteristics we seek in our investment portfolio. We are eager to continue Lone Star’s history of excellence and look forward to supporting the continued growth of the business through organic development and complementary bolt-on acquisitions.”

Debt financing for the transaction was provided by Chicago-based Monroe Capital LLC.

Jones Day, Cleveland, provided legal counsel to J.F. Lehman & Company. Stifel, St. Louis, served as financial advisor to Lone Star, and Richmond, Virginia-based Hunton Andrews Kurth LLP provided legal counsel for the transaction.

The acquisition represents JFLCO’s 32nd sponsored platform investment since the firm’s inception.