US Ecology and NRC Group Holdings entered into a merger agreement in an all-stock transaction with an enterprise value of $966 million. The transaction is expected to close in Q4/19 and is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, respective stockholder approvals and other customary closing conditions.
The transaction will create a nationwide leader in industrial and hazardous waste management services and is projected to be mid-single digit accretive to US Ecology’s 2020 adjusted earnings per share, before synergies.
“The addition of NRCG’s substantial service network strengthens and expands US Ecology’s suite of environmental services,” said Jeffrey R. Feeler, President, chief executive officer and chairman of US Ecology. “This transaction will establish US Ecology as a leader in standby and emergency response services and adds a new waste vertical in oil and gas exploration and production landfill disposal to further drive waste volumes throughout the Gulf region.”
NRCG is one of two leading national Oil Spill Removal Organizations that provide mandated standby emergency response for the transportation of oil products. With more than 50 service centers, NRCG has a national service network providing emergency and spill response, light industrial services, hazardous and industrial waste management and transportation services
The transaction has been approved by both companies’ boards of directors. Upon completion of the transaction, US Ecology stockholders will own approximately 70% of the combined company, and NRCG stockholders will own approximately 30% on a fully diluted basis. The combined company will use the US Ecology name, and its shares will continue to be listed on the Nasdaq Global Select Market under the ticker ECOL.
Under the terms of the merger agreement, US Ecology will form a new holding company which will take the name of US Ecology, Inc. immediately upon the closing of the transaction and will own both US Ecology and NRCG.
Wells Fargo Securities and Bank of America Merrill Lynch are acting as Joint Lead Arrangers for the financing.
Bank of America Merrill Lynch and Houlihan Lokey are serving as US Ecology’s financial advisors and Dechert is serving as legal counsel. Evercore is serving as NRCG’s financial advisor and Jones Day is serving as legal counsel.