Clean Harbors, Inc. announced the completion of its acquisition of HEPACO, a leading environmental provider of field and emergency response services in the Eastern U.S. Clean Harbors purchased HEPACO from Gryphon Investors for $400 million in cash. The acquisition was financed through proceeds from a recently completed $500 million expansion of the Company’s Term Loan facility. The terms of the $500 million expansion remain consistent with the existing and outstanding facility.
On an adjusted basis, HEPACO generated full-year 2023 EBITDA of approximately $36 million on $270 million of revenue. Clean Harbors expects the acquisition to generate cost synergies of approximately $20 million after the first full year of operations, which equates to a post-synergy acquisition multiple of 7.1 times. Based on the completion date of the transaction, Clean Harbors currently expects that HEPACO will add approximately $30 million of Adjusted EBITDA in 2024. Clean Harbors’ management plans to update its 2024 guidance when it reports its first-quarter results on May 1.
Eric Gerstenberg, Co-Chief Executive Officer of Clean Harbors, said, “HEPACO is an ideal cultural fit with our existing Field Services business, and we are confident that this will be a highly synergistic deal with strong margin improvement potential. We expect to achieve our targeted cost synergies in areas such as subcontracting, branch network, asset rentals, transportation and procurement. We welcome HEPACO’s talented team to Clean Harbors and look forward to a smooth integration in the coming months.”
Headquartered in Charlotte, North Carolina, HEPACO has approximately 1,000 employees and 900 vehicles at 40 regional locations in 17 states. Its primary offerings to its more than 2,000 customers include field services, environmental remediation and emergency response services. In addition to regional operations in those 17 states, HEPACO’s National Operations center provides 24-hour coverage across the continental U.S. through a network of contractors.
“As an established leader in Field Services, HEPACO will support the growth of our Environmental Services segment and our Vision 2027 long-term strategic plan,” said Mike Battles, Co-Chief Executive Officer of Clean Harbors. “The addition of HEPACO’s highly trained team, specialized equipment, geographic footprint, and rail and marine service capabilities enables us to tap into additional markets, as well as cross-sell our full suite of environmental and industrial services. HEPACO also provides the opportunity for us to drive additional volumes of waste to our network of disposal and recycling facilities.”