- Acquisition Strengthens Clean Harbors’
Daylighting and Hydro Excavation Expertise and Service
Offerings
- Lonestar Shareholders to Receive CAD
$0.72 per Share
- Transaction Valued at CAD $44.1
Million, Including Equity Payout and Assumption of Debt
- Transaction Expected to Close in July
2017
Clean Harbors, Inc. (“Clean Harbors”) (NYSE: CLH) and Lonestar
West Inc. (“Lonestar”) (TSX.V: LSI) today announced a definitive
agreement whereby Clean Harbors will acquire the outstanding shares
of Lonestar in an all-cash transaction valued at CAD $44.1
million.
Under the terms of the agreement, Lonestar shareholders will
receive CAD $0.72 per share and Clean Harbors will assume CAD $22.3
million in outstanding debt. The purchase price represents an 84.6%
premium over the closing price of the Lonestar shares on
the TSX Venture Exchange (“TSXV”) for May 10,
2017, and an 82.2% premium over the weighted average trading
price of the Lonestar shares on the TSXV for the 20 trading days
ending May 10, 2017.
The transaction will enable Clean Harbors to:
- Broaden its daylighting and hydro
excavation capabilities
- Capitalize on the growing demand for
these services
- Expand into new geographies, while
accelerating growth in existing regions
- Add economies of scale and achieve
operating efficiencies
- Maximize cross-selling
opportunities
- Acquire a business with the potential
for strong cash flow generation
Daylighting and hydro excavation are non-destructive methods of
excavation that use pressurized water to agitate the earth and a
powerful vacuum to remove debris and safely expose underground
utilities, pipelines and other infrastructure.
“Daylighting and hydro excavation services are markets that we
believe offer strong growth prospects,” said Alan S. McKim, Clean
Harbors' Chairman, President and Chief Executive Officer. “With the
addition of Lonestar, we see an opportunity to accelerate our
position in that marketplace and double our scale. Given the
versatility of hydrovacs, we can leverage these highly desirable
assets across a number of our lines of business. Geographically,
this transaction aligns well with our existing footprint, as
Lonestar serves key markets across Canada and the United States. We
look forward to adding James Horvath and his talented team to our
Daylighting services group.”
James P. Horvath, Lonestar’s President and Chief Executive
Officer, said, “This transaction, which has the full support of our
Board of Directors and management team, will deliver fair value to
our shareholders with a significant premium to recent trading
prices. It will also directly benefit our employees and customers.
With its exceptional reputation for quality and service, Clean
Harbors is an ideal partner that strategically enhances our ability
to grow. The company has a proven track record in the hydro
excavation space, deep customer relationships across key industries
and an expansive network of North American locations. We are
excited to join such an established leader.”
Lonestar has more than 160 employees and maintains a network of
12 operating centers in key areas throughout Canada and the United
States. The company generated CAD $43 million of revenues in 2016.
Lonestar provides services for drilling operations, oil sands
projects, plant maintenance, as well as commercial, municipal and
civil projects. Clean Harbors expects the acquisition will be
accretive in 2017, excluding one-time fees and acquisition-related
expenses.
Under the terms of the definitive agreement, the acquisition
will be accomplished by way of an amalgamation (the “Amalgamation”)
pursuant to the Canada Business Corporations Act. The proposed
Amalgamation is subject to certain conditions including, without
limitation, the approval by: the holders of Lonestar shares
representing at least two-thirds of votes cast in person or by
proxy at the meeting of Lonestar shareholders to be held to approve
the Amalgamation and appropriate regulatory and other authorities.
There is no financing condition to completion of the transaction.
The Lonestar shareholders' meeting to approve the Amalgamation is
expected to be held on July 12, 2017 and the closing of the
Amalgamation is anticipated to be on July 14, 2017. An information
circular in respect of the meeting is expected to be mailed to
Lonestar shareholders at the beginning of June 2017. Each of the
directors and officers of Lonestar and certain other principal
shareholders, collectively holding approximately 35.7% of the
issued and outstanding Lonestar shares, have entered into
agreements with Clean Harbors pursuant to which such holders have
agreed to vote such Lonestar shares in favor of the Amalgamation at
the Lonestar shareholders' meeting.
The Board of Directors of Lonestar has unanimously approved the
Amalgamation and determined that the Amalgamation is in the best
interests of Lonestar and the Lonestar shareholders and recommends
that the Lonestar shareholders vote in favor of the
Amalgamation.
Industrial Alliance Securities Inc. is acting as exclusive
financial advisor to Lonestar in connection with the Amalgamation
and has provided the Board of Directors of Lonestar with its verbal
opinion that, as of the date hereof, subject to receipt and review
of the final documentation relating to such opinion and the
Amalgamation, and certain assumptions, limitations and
qualifications, the consideration to be received by the Lonestar
shareholders pursuant to the Amalgamation is fair, from a financial
point of view, to the Lonestar shareholders.
The definitive agreement contains provisions that, among other
things: prohibit Lonestar from soliciting or initiating discussions
regarding any other business combination or sale of material
assets, subject to certain conditions; grant Clean Harbors the
right to match competing unsolicited proposals; provide for a
non-completion fee of CAD $1.1 million, plus reimbursement of
expenses, payable to Clean Harbors in certain circumstances if the
Amalgamation is not completed.
About Clean HarborsClean Harbors (NYSE: CLH) is North
America’s leading provider of environmental, energy and industrial
services. The Company serves a diverse customer base, including a
majority of the Fortune 500, across the chemical, energy,
manufacturing and additional markets, as well as numerous
government agencies. These customers rely on Clean Harbors to
deliver a broad range of services such as end-to-end hazardous
waste management, emergency spill response, industrial cleaning and
maintenance, and recycling services. Through its Safety-Kleen
subsidiary, Clean Harbors also is North America’s largest
re-refiner and recycler of used oil and a leading provider of parts
washers and environmental services to commercial, industrial and
automotive customers. Founded in 1980 and based in Massachusetts,
Clean Harbors operates throughout the United States, Canada, Mexico
and Puerto Rico. For more information, visit
www.cleanharbors.com.
About Lonestar WestBased in Sylvan Lake, Alberta,
Lonestar West Inc. operates a fleet of 140 Hydrovac, Vacuum and
Auxiliary units throughout Western Canada, Ontario, California, and
the southern United States. It is focused on profitably growing its
HVAC services to become a major competitor in the North American
market. For more information please visit the Lonestar West website
at www.lonestarwest.com
Safe Harbor StatementAny statements contained herein that
are not historical facts are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are generally identifiable by use
of the words “believes,” “expects,” “intends,” “anticipates,”
“plans to,” “estimates,” “projects,” or similar expressions. Such
statements may include, but are not limited to, statements about
future financial and operating results, and other statements that
are not historical facts. Such statements are based upon the
beliefs and expectations of Clean Harbors’ management as of this
date only and are subject to certain risks and uncertainties that
could cause actual results to differ materially including, without
limitation, those items identified as “risk factors” in Clean
Harbors’ most recently filed Form 10-K and Form 10-Q. Therefore,
readers are cautioned not to place undue reliance on these
forward-looking statements. Clean Harbors undertakes no obligation
to revise or publicly release the results of any revision to these
forward-looking statements other than through its filings with the
Securities and Exchange Commission, which may be viewed in the
“Investors” section of Clean Harbors’ website at
www.cleanharbors.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20170511005674/en/
Investors:Clean Harbors, Inc.Jim
Buckley, 781-792-5100SVP Investor
RelationsBuckley.James@cleanharbors.comorMedia:Clean Harbors, Inc.Eric Kraus,
781-792-5100EVP Corporate Communications & Public
AffairsKraus.Eric@cleanharbors.comorLonestar West Inc.James
Horvath, 403-887-2074President & CEOinfo@lonestarwest.com
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