Island environmental innovator swings in $966M deal

Keep on trucking: Environmental remediation expert NRC Group, formerly headquartered in Great River, has changed hands once again -- this time rolling into Idaho-based US Ecology.
By GREGORY ZELLER //

A hot-potato environmental innovator with a vital Great River operational hub has been acquired in a nearly $1 billion stock deal.

Idaho-based US Ecology Inc. announced Monday that it has entered into a definitive merger agreement with NRC Group Holdings Corp., a global provider of environmental and waste-management services. In April, NRC Group transitioned its headquarters from Great River to Texas – and it will now be folded into a new environmental-compliance and comprehensive waste-management entity under the US Ecology banner.

The acquisition – an all-stock transaction with an enterprise value of roughly $966 million, according to US Ecology – is slated to close in the fourth quarter of calendar 2019, after obtaining required regulatory approvals. The deal has already been approved by both companies’ directors.

There was no immediate word on any personnel changes related to the merger. An NRC Group spokesman said the company had “no specific comment” on NRCG President and CEO Christian Swinbank or any of the Texas-based company’s roughly 1,500 employees.

US Ecology said in a statement it would maintain its Boise headquarters, with “regional support centers” operating in Idaho, Michigan, Texas and Houston, the location of NRC Group’s Texas headquarters.

US Ecology President, CEO and Chairman Jeffrey Feeler, who will maintain those titles with the newer, bulkier entity, said NRC Group’s “substantial service network” was a welcomed reinforcement of his company’s already considerable environmental slate.

“This transaction will establish US Ecology as a leader in standby and emergency-response services,” Feeler said Monday, adding the acquisition also includes “a new waste vertical in oil and gas exploration and production landfill disposal to further drive waste volumes throughout the Gulf region.”

NRC Group is a leading U.S. Coast Guard-sanctioned Oil Spill Removal Organization, qualified to provide mandated standby emergency response for the transportation of oil products.

US Ecology – which already specializes in retail compliance and less-than-truckload waste hauling, and aspires to become the world’s “premier provider of comprehensive environmental services” – also gains new expertise in industrial-waste services, plus access to NRC Group’s network of 50 national and international service centers, key to US Ecology’s growth strategy.

The merger is also a score for US Ecology stockholders, who will own approximately 70 percent of the combined company once the deal clears the Hart-Scott-Rodino Antitrust Improvements Act, the 1976 federal law governing large-company mergers.

Jeffrey Feeler: New services, new verticals.

Current NRC Group stockholders will own approximately 30 percent, on a fully diluted basis, and will enjoy “continued participation in the future prospects expected to result from the combination,” according to US Ecology.

With the parent company predicting quick, single-digit earnings-per-share gains, plus “potential for upside through realization of additional revenue and cross-selling opportunities,” the bottom line looks bright for stockholders on both sides – and for an international player Swinbank described as an emerging leader in industrial and hazardous waste-management.

“NRCG will bring highly complementary services and customers to US Ecology and will position the combined company as a leading player in industrial waste management, while strengthening its position in the overall environmental-services market,” the NRC Group president said Monday. “We believe the combination will provide compelling upside for stockholders of both companies.”

The US Ecology acquisition is the latest twist on NRC Group’s recent rollercoaster ride. In October 2018, New York-based Hennessy Capital Acquisition Corp. III closed its acquisition of NRC Group Holdings LLC from investment affiliates of J.F. Lehman & Co., a middle-market private-equity firm focused on aerospace, defense and environmental sectors. As part of that deal, Hennessey Capital Acquisition changed its name to NRC Group Holdings Corp.

The NRC Group acquired by Hennessy Capital was established in June 2018 through the combination of two businesses: National Response Corp. – a circa-1992 chemical, industrial, power and government solutions provider – and Sprint Energy Services, another Texas-based environmental waste-management specialist.