Waste-disposal specialist Clean Harbors (CLH -0.69%) today announced a $1.25 billion, all-cash bid to acquire privately held rival Safety-Kleen.
For two years, Clean Harbors has sought the hand of the creatively spelled motor-oll recycler but has been continually rebuffed, as Safety-Kleen argued that Clean Harbors' $13-a-share bid was an attempt to acquire it on the cheap. Turns out Safety-Kleen was right. Acquiring the company wound up costing Clean Harbors $24.50 a share.
What finally persuaded Clean Harbors to open its wallet and pay through the nose? In August, Safety-Kleen filed to raise $400 million through an initial public offering of its stock. Doing that would have given the company the money it needed to remain independent. With the IPO looming, Clean Harbors was faced with a put-up-or-shut-up moment -- and so it put up the cash to buy Safety-Kleen, at nearly twice the price it wanted to pay two years ago.
In exchange, Clean Harbors now controls a company with a 22% market share of the 900 million gallons of recyclable used oil produced in the U.S. annually, along with $1.3 billion in annual revenues, and $161 million in adjusted earnings before interest, taxes, depreciation, and amortization.
