US Ecology Inc. (Nasdaq: ECOL) is buying hazardous waste hander Environmental Quality Co. for $465 million.
Environmental Quality, headquartered in Wayne, Mich., provides environmental services and waste management, including treatment and disposal of hazardous waste. The company owns one hazardous waste landfill outside of Detroit, 13 waste treatment and recycling facilities and 21 service centers. Environmental Quality is backed by private equity firm Kinderhook Industries LLC.
Boise, Idaho-based US Ecology treats and disposes of radioactive and hazardous waste. The deal expands US Ecology's footprint and environmental services offerings.
The deal will be financed with a combination of cash on hand and debt financing consisting of a new $540 million credit facility. The credit facility is made up of a $415 million seven-year term loan and $125 million five-year revolving credit facility.
Kinderhook, headquartered in New York, specializes in acquiring non-core divisions of public companies. The firm has invested in Custom Ecology Inc., SMS Marketing services and Rizzo Environmental Services.
Houlihan Lokey is acting as US Ecology's financial adviser, while Stoel Rives LLP and Dechert LLP are providing legal advice. Stifel is Environmental Quality's financial adviser, while Kirkland & Ellis is legal counsel. Wells Fargo Securities LLC and Credit Suisse Securities (USA) LLC are acting as joint lead arrangers for the financing.
To learn more about the impact of environmental due diligence on M&A, read our interview with Peter Baty, a project director at Sanborn, Head & Associates, Inc., and watch our video with Baty.