|While I would like to think that the EPA backed off based on the merits of their complaint, we have to remember that it is an election year. |
Heckmann (HEK) has been busy:
The company recently raised $73.6 million, selling 18.4 million shares at $4.40 per share.
Heckmann Corporation Completes Public Offering of Common Stock
The company recently announced a note offering
Heckmann Corporation Announces Planned Offering of $250,000,000 Senior Notes Due 2018
Heckmann also acquired an oil recycling company:
Heckmann Corporation Announces Definitive Agreement to Acquire Thermo Fluids Inc. Expanding Heckmann’s Total Environmental Solutions Offering
Strategic Acquisition of Environmental and Fluid Services, Oil Collection and Recycling Company Diversifies Heckmann’s Revenue Stream and Balances Its Commodity Exposure
Thermo Fluids’ Business Model Provides Predictable Revenue, EBITDA and Operating Income Growth and Further Enhances Heckmann’s Environmental Services Capabilities
Press Release: Heckmann Corporation – Thu, Mar 8, 2012 4:01 PM EST
PITTSBURGH, Pa.--(BUSINESS WIRE)-- Heckmann Corporation (NYSE: HEK - News) today announced that it has signed a definitive agreement with CIVC Partners, a Chicago-based private equity firm, to acquire Thermo Fluids Inc. (“TFI”). TFI is a route-based environmental services and waste recycling solutions company that focuses primarily on the collection and recycling of used motor oil (“UMO”). TFI is the largest seller of commercial fuel oil from recovered UMO in the Western United States. This strategic acquisition expands Heckmann’s total environmental solutions offering and diversifies the Company’s operations by revenue, geography and customer base. The acquisition is expected to be immediately accretive to Heckmann’s earnings in 2012 and close early in the second quarter, subject to customary closing conditions.
Under terms of the Agreement, Heckmann plans to acquire TFI for $245 million to be paid in cash and shares of the Company’s common stock.
“Our focus to-date has been on total water and wastewater solutions for the shale oil and gas industry. TFI’s business expands our strategy to provide total environmental services to our customers,” said Richard J. Heckmann, Chairman and Chief Executive Officer of Heckmann Corporation. “This acquisition diversifies our revenue stream and extends our oil industry offering to include services for virgin and reprocessed oil. Similar to Heckmann Water Resources’ (HWR) comprehensive water services, TFI acts as an integrated single solutions provider for a number of environmental services, but primarily related to oil collection, recycling and resale. This is a highly fragmented and regulated industry with limited competition for complete service providers like TFI. TFI has a strong business model with robust and predictable revenue, EBITDA and operating income growth that will contribute to our top and bottom lines immediately. We expect approximately 31% of our revenues in 2012 to come from recovered and reprocessed used oil and other environmental services from Thermo Fluids. The management team at TFI brings considerable knowledge and expertise that broadens our leadership. With the strong team assembled by James Devlin, TFI’s CEO, we will immediately embark on an internal and external growth strategy. Additionally, we can leverage the expertise of our management team, as we successfully built and operated an identical business and strategy as part of US Filter.”
Assuming three quarters of operations, Heckmann expects Thermo Fluids Inc. to generate revenues between $105 and $115 million for the nine-month period following the closing of the transaction.
TFI has operations throughout the Western United States, with facilities and customers in 18 states where it is the No. 1 or No. 2 provider of oil collection and environmental services in approximately 80% of the areas it serves. TFI has 31 facilities, a fleet of approximately 290 trucks, more than 190 railcars and more than 230 employees. TFI customers include Walmart, Penske, Jiffy Lube, Halliburton, Peabody Energy, ConocoPhillips and CEMEX.
TFI has developed an efficient and low-cost process whereby UMO is converted into reprocessed fuel oil (“RFO”) utilizing a proprietary filtration process to remove impurities and produce a cleaner, more desirable RFO with superior energy output characteristics. RFO is sold to industrial customers for less than half the cost of the alternative, which is diesel fuel while generating more than twice the energy on a BTU adjusted basis. RFO is also increasingly sold to re-refiners as a critical feedstock for the production of base lubricants. In 2011, TFI processed and sold approximately 54 million gallons of reprocessed fuel oil to over 250 customers.
James Devlin, Chief Executive Officer of TFI stated, “We believe Heckmann is an ideal strategic partner for our business. Their leadership team is highly qualified with operational, environmental and regulatory expertise that folds into our current business. Both TFI and Heckmann are in growth modes, and our services complement and expand on Heckmann’s water solutions offering for the oil and gas industry. We are excited to join their team and to be part of the Heckmann total environmental solutions offering.”
Houlihan Lokey served as the financial advisor to Thermo Fluids and its principal shareholder, CIVC.
Additional information regarding the acquisition will be made available in Heckmann Corporation’s filings with the United States Securities and Exchange Commission on Form 8-K.