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Clean Harbors Acquires Western-Based Used Oil Operation For $85 Million


CLHBefore the market open, Clean Harbors (NYSE:CLH) announced that the company signed a definitive agreement to acquire Thermal Fluids Inc. (TFI) a subsidiary of Nuverra Environmental (NES) in an all-cash transaction. The acquisition is expected to close by early March of this year, but is subject to typical closing conditions, including regulatory approval. TFI is based in Scottsdale, AZ and provides services to over 20,000 customers in 21 states.

TFI is a regionally-focused provider of various environmental and industrial waste services. Environmental services provided include used oil and oil filter recycling, solvent recycling, parts washers and antifreeze products, while its industrial services include vacuum services, remediation and hazardous waste management. The company has a platform of collection facilities, storage capability, rail assets and a transportation fleet. Importantly, TFI collects used waste oil in the Western region of the U.S and is expected to add approximately 50 million additional gallons of waste oil to Safety Kleen’s recycling and re-refining business.

Clean Harbors is clearly refocusing on its core business and the acquisition will help the Safety Kleen business, particularly the oil recycling and re-refining business, gain greater scale and better operating leverage.

Shares of Clean Harbors closed yesterday at $43.15. CLH has a 1-year high of $65.53 and a 1-year low of $43.05. The stock’s 50-day moving average is $48.02 and its 200-day moving average is $52.02.

On the ratings front, 6 research analysts have assigned a Hold rating and 4 analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $43.17, which is roughly 10% downside from current levels.