GRYPHON INVESTORS TO SELL HEPACO TO CLEAN HARBORS FOR $400 MILLION
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The acquisition of HEPACO by Clean Harbors represents a significant consolidation within the environmental services sector, a space that is seeing increased demand due to heightened environmental regulations and a growing emphasis on sustainability. From a market perspective, this move is likely to strengthen Clean Harbors' market position in the Eastern United States, potentially leading to increased market share and service diversification.
Given the transaction value of $400 million and the mention of HEPACO tripling its revenue and EBITDA under Gryphon's ownership, it suggests a robust financial health and growth trajectory for HEPACO that Clean Harbors could leverage. For stakeholders, the short-term implications may include integration costs and potential market reaction to the acquisition price. Long-term benefits could be realized through economies of scale, cross-selling opportunities and expanded service offerings.
Analyzing the financial implications, the acquisition's price tag of $400 million needs to be assessed against the backdrop of HEPACO's financial performance. The tripling of revenue and EBITDA is a strong indicator of HEPACO's profitability and operational efficiency, which could be accretive to Clean Harbors' earnings. Investors will scrutinize the deal's impact on Clean Harbors' balance sheet, cash flow and potential for earnings growth. The strategic nature of the acquisition, focusing on geographical and service expansion, suggests a calculated move to enhance shareholder value over time.
It is also important to consider the financing of the acquisition, as it could affect Clean Harbors' leverage and liquidity. The company's approach to integrating HEPACO's operations and realizing synergies will be critical in determining the financial success of this transaction.
The environmental and industrial services industry is increasingly competitive, with a focus on comprehensive service offerings and rapid response capabilities. HEPACO's emergency response services and environmental remediation are essential for industries such as transportation, utilities and energy, which are under constant scrutiny for environmental compliance.
The acquisition by Clean Harbors, a company with a broad range of environmental services, could enhance the combined entity's ability to offer a one-stop solution for clients. This could lead to stronger client relationships and an improved competitive edge. The mention of HEPACO's expansion through seven add-on acquisitions under Gryphon's ownership highlights a successful strategy of growth through strategic mergers and acquisitions, a trend that is common in the industry to quickly gain new capabilities and regional presence.
Gryphon initially invested in the Company in August 2016 and completed seven add-on acquisitions during its ownership. Headquartered in
Alex Earls, Partner and Head of Gryphon's Business Services Group, said, "We have greatly enjoyed partnering with HEPACO management to build a premier company in the environmental and emergency services industry while more than tripling revenue and EBITDA. We are confident that Clean Harbors will be an excellent home for HEPACO, and we believe that Clean Harbors will accelerate HEPACO's ongoing growth initiatives."
HEPACO CEO Robb Schreck commented, "Gryphon's value-added support throughout our partnership helped us drive above-market growth and significantly expand our service offerings. HEPACO management looks forward to working with Clean Harbors to continue driving growth and executing on our mission-critical environmental service work."
Phil Petrocelli, Gryphon Business Services Operating Partner, added, "Through organic operational initiatives and several highly strategic add-ons, HEPACO has significantly expanded its geographical reach, increased service area density, and diversified its offerings, emerging as a leading environmental service provider in the
Piper Sandler Companies and Houlihan Lokey, Inc. served as financial advisors to HEPACO, while Kirkland & Ellis LLP and Moore & Van Allen PLLC acted as legal advisors to the Company.
About HEPACO
HEPACO (www.hepaco.com) is a leading environmental and emergency services company in the
About Gryphon Investors
Gryphon Investors (www.gryphoninvestors.com) is a leading middle-market private equity firm focused on profitably-growing and competitively-advantaged companies in the Business Services, Consumer, Healthcare, Industrial Growth, and Software sectors. With approximately
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SOURCE Gryphon Investors
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