Advertisement
Canada markets close in 24 minutes

  • S&P/TSX

    21,780.11
    +71.67 (+0.33%)
     

  • S&P 500

    4,960.02
    -51.10 (-1.02%)
     

  • DOW

    37,931.54
    +156.16 (+0.41%)
     

  • CAD/USD

    0.7272
    +0.0008 (+0.11%)
     

  • CRUDE OIL

    83.28
    +0.55 (+0.66%)
     

  • Bitcoin CAD

    88,463.86
    +1,334.12 (+1.53%)
     

  • CMC Crypto 200

    1,383.05
    +70.43 (+5.37%)
     

  • GOLD FUTURES

    2,408.70
    +10.70 (+0.45%)
     

  • RUSSELL 2000

    1,940.17
    -2.79 (-0.14%)
     

  • 10-Yr Bond

    4.6150
    -0.0320 (-0.69%)
     

  • NASDAQ

    15,259.99
    -341.51 (-2.19%)
     

  • VOLATILITY

    18.94
    +0.94 (+5.23%)
     

  • FTSE

    7,895.85
    +18.80 (+0.24%)
     

  • NIKKEI 225

    37,068.35
    -1,011.35 (-2.66%)
     

  • CAD/EUR

    0.6824
    +0.0003 (+0.04%)
     
MARKETS LIVE BLOG:

S&P 500 SLIPS BELOW 5,000; NASDAQ SINKS ON NETFLIX DRAG

Fed's Goolsbee says 'It makes sense to wait' before cutting rates

Harsco Acquires Stericycle's Environmental Solutions Business

Zacks Equity Research

Harsco Corporation HSC yesterday announced that it completed the acquisition of Stericycle, Inc.’s SRCL Environmental Solutions business (“ESOL”). The transaction value was $462.5 million, financed by funds raised through new debts and revolving credit facilities.

It is worth mentioning here that the buyout deal was announced by Harsco on Feb 7.

Stericycle’s ESOL is one of the well-renowned providers of waste transportation (hazardous) and processing solutions. Its customers mainly belong to healthcare, industrial and retail markets. As announced in Feb 2020, ESOL is anticipated to generate $550 million revenues, and adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of $35 million.

Discussion on Buyout

As noted, the addition of ESOL will strengthen Harsco’s efforts to transform into a bigwig in the environmental solutions arena. Also, Harsco’s capabilities, scale of operations and geographical presence will get a boost from the buyout. The company now anticipates generating 85% of sales from environmental solutions and related services.

Harsco will integrate ESOL with its Clean Earth business — a well-known U.S.-based specialty waste processor. Revenues of the combined businesses are anticipated to be $850 million per year.

Further, Harsco anticipates achieving cost synergy savings of $15 million in the 3rd year of the buyout completion. Additionally, earnings accretion and positive contribution to free cash flow are expected in the first year of the buyout. Also, Harsco intends on doubling EBITDA of ESOL in three years of completion.
 
Harsco’s Inorganic Initiatives
 
The above-mentioned transaction is consistent with Harsco’s policy of acquiring meaningful businesses or divesting non-core assets to improve its growth opportunities.

In January this year, the company divested its IKG business to KPS Capital Partners, LP for $85 million — comprising notes and cash. Harsco intends on using the cash proceeds (net) for repaying debts. With the transaction, Harsco completed the divestment of its Industrial segment — that comprised Air-X-Changers, Patterson-Kelley and IKG businesses.

In November 2019, the company sold its Patterson-Kelley business to an affiliate of SPX Corporation SPXC for cash of $60 million. Harsco completed the divestment of its Air-X-Changers business to Chart Industries, Inc. GTLS in July 2019 for $592 million in cash. In June 2019, Harsco acquired Clean Earth, Inc. for $628 million in cash. The other party to the transaction was Compass Diversified Holdings.

Zacks Rank, Estimate Trend and Price Performance

Harsco currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past three months, the company’s shares have plunged 70% compared with the industry’s decline of 20.3%.




ADVERTISEMENT

Also, the Zacks Consensus Estimate for its earnings per share is pegged at 57 cents for 2020 and $1.29 for 2021, marking declines of 50.4% and 8.5% from the respective 60-day-ago figures.

Harsco Corporation Price and Consensus

 

Harsco Corporation Price and Consensus
Harsco Corporation Price and Consensus

Harsco Corporation price-consensus-chart | Harsco Corporation Quote

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.

This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.

See their latest picks free >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Stericycle, Inc. (SRCL) : Free Stock Analysis Report
 
Chart Industries, Inc. (GTLS) : Free Stock Analysis Report
 
Harsco Corporation (HSC) : Free Stock Analysis Report
 
SPX Corporation (SPXC) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.