Jeremy L. Dillon
RW Monitor
6/20/2014
U.S. Ecology finalized its purchase of The Environmental Quality Company this week for $465 million, making the previously announced acquisition official. US Ecology announced back in April that it would purchase EQ in an effort to expand its geographic reach. “The acquisition of EQ aligns perfectly with our strategy of leveraging high quality treatment, disposal and recycling assets and complementary service businesses to drive growth,” US Ecology President and CEO Jeff Feeler said in a statement. “EQ broadens our geographic footprint by adding a fifth hazardous waste landfill and a network of 18 treatment facilities serving the eastern half of the United States including many of the country’s key industrial centers. With a solid stream of recurring revenue and national customer base, the combined company offers cross-selling opportunities and operational efficiencies that we believe will deliver compelling value to both our customers and our stockholders for years to come,” he said.
From the financial side of the deal, U.S. Ecology appears set to double its revenue. Whereas U.S. Ecology brought in revenue of $201 million in 2013, the combined revenue from 2013 of the two companies equals $577 million. In terms of adjusted EBITA (earnings before interest, taxes and amortization), the combined companies would have had $126 million in 2013, compared to U.S. Ecology’s adjusted EBITA of $71 million. The acquisition was funded with cash on hand and borrowings under a new $540 million credit facility made up of $415 million in 7-year term debt and a $125 million 5-year revolving line of credit, the company said. US Ecology expects to issue an updated earnings guidance in August with its second quarter results.
US Ecology also announced the addition of former EQ executives into the US Ecology leadership team. EQ’s former president and CEO David Lusk has been added to US Ecology’s board of directors, while Mario Romero, vice president of operations of EQ, will serve as executive vice president of field and industrial services.
