Stericycle, Inc. (Nasdaq: SRCL) today announced that it has entered
into a definitive agreement to sell its Domestic Environmental
Solutions business, excluding the healthcare customer and unused
consumer pharmaceutical take-back services, to Harsco Corporation
(NYSE: HSC) for $462.5 million in cash, subject to customary
adjustments set forth in the agreement.
The transaction includes Stericycle’s Domestic
Environmental Solutions business including Manufacturing and
Industrial Services and the retail portion of Hazardous Waste
Services, which together employ approximately 2,000 team members
across 61 facilities. Stericycle will continue to offer
solutions for unused consumer pharmaceutical take-back services and
provide hazardous waste services to healthcare customers.
Harsco will provide transportation and disposal services to
healthcare customers under a long-term service agreement to be
entered into at the closing of the transaction.
"The sale of the Domestic Environmental
Solutions business demonstrates important progress in our
transformation as we improve margin percentages, reduce debt,
enhance our balance sheet flexibility, and drive long-term
shareholder value,” said Cindy J. Miller, Chief Executive Officer
of Stericycle. “As a focused provider of environmental
solutions in the U.S., Harsco is well-positioned to drive this
business forward, and we are confident this transaction is in the
best interest of Stericycle and our shareholders, our customers and
team members. We thank our team members and customers for their
continued support, and we look forward to working closely with
Harsco to ensure a smooth transition.”
The transaction, which is subject to customary
closing conditions and regulatory approvals and is expected to
close in the first quarter of 2020, will not impact the operations
of Stericycle’s regulated medical waste and secure information
destruction businesses. Stericycle intends to use net
proceeds from the divestiture to pay down outstanding debt.
Stericycle today also announced that it
completed the sale of its operations in Chile in December to an
affiliate of Veolia for approximately $30.7 million. This
transaction is subject to customary post-closing covenants and
indemnity obligations. The divestiture of the company’s
Chilean operations marks the fifth divestiture executed by
Stericycle during 2019. Over the course of the year,
Stericycle also sold a texting business based in the UK, a
telephone answering services business in North America, a
pharmaceutical returns business, and substantially all its
operations in Mexico. The five transactions combined
generated approximately $83.7 million in gross proceeds during
2019.
Miller continued, “Beyond our portfolio
rationalization efforts, our team is focused on driving revenue
quality and improving operational efficiencies across our business
as well as the implementation of our global ERP system. As we
continue to make progress on these initiatives, we remain committed
to deepening our value proposition for clients with differentiated
services and enhancing value for Stericycle shareholders.”
Stifel acted as the financial advisor to
Stericycle with respect to the transaction to sell the Domestic
Environmental Solutions business and Latham & Watkins LLP acted
as legal advisor. Bank of America Securities also provides
financial advice to Stericycle.
Stericycle is holding its fourth quarter
earnings conference call on Thursday, February 27, 2020, at 8:00
a.m. central time, which will include discussion of this
transaction. Dial (888) 317-6003 in the U.S., (866) 605-3851
in Canada, or (412) 317-6061 if outside the U.S./Canada at least 10
minutes before the call begins. Upon dialing the number, you will
be prompted to enter the Elite Entry number 7992292. Presentation
materials will be posted prior to the conference call at
http://investors.stericycle.com. To listen to the webcast via
the Internet or access an audio replay of the call, visit
http://investors.stericycle.com.
Forward Looking Statements
This document may contain forward-looking
statements that involve risks and uncertainties, some of which are
beyond our control (for example, general economic and market
conditions). When we use words such as "believes," "expects,"
"anticipates," "estimates" or similar expressions, we are making
forward-looking statements. Actual results could differ
significantly from the results described here. Factors that could
cause such differences include changes in governmental regulation
of the collection, transportation, treatment and disposal of
regulated waste or the proper handling and protection of personal
and confidential information, the level of government enforcement
of regulations governing regulated waste collection and treatment
or the proper handling and protection of personal and confidential
information, decreases in the volume of regulated wastes or
personal and confidential information collected from customers, the
ability to implement our enterprise resource planning or execute on
business transformation initiatives and achieve the anticipated
benefits and cost savings, charges related to portfolio
rationalization or the failure to achieve the desired
results, the obligations to service substantial indebtedness and
comply with the covenants and restrictions contained in private
placement notes and credit agreements, political, economic,
inflationary, currency and other risks related to our foreign
operations, the outcome of pending or future litigation including
litigation with respect to the U.S. Foreign Corrupt Practices Act,
changing market conditions in the healthcare industry, competition
and demand for services in the regulated waste and secure
information destruction industries, changes in the demand and price
for recycled paper, failure to maintain an effective system of
internal control over financial reporting, delays in implementing
remediation efforts with respect to existing material weakness,
identification of additional material weaknesses, failure of
current remediation efforts to address existing material
weaknesses, disruptions in or attacks on information technology
systems, the risk that the transaction described herein may not be
completed in a timely manner or at all, the failure to satisfy the
conditions to the consummation of the such transaction, including
the receipt of certain governmental and regulatory approvals, the
effect of the announcement or pendency of such transaction on the
Company’s business relationships, operating results and business
generally, risks related to diverting management’s attention from
the Company’s ongoing business operations, as well as other factors
described in filings with the U.S. Securities and Exchange
Commission, including the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2018 and subsequent Quarterly
Reports on Forms 10-Q. As a result, past financial performance
should not be considered a reliable indicator of future
performance, and investors should not use historical trends to
anticipate future results or trends. To the extent permitted under
applicable law, we make no commitment to disclose any subsequent
revisions to forward-looking statements.
ABOUT STERICYCLE Stericycle,
Inc., (Nasdaq: SRCL) is a U.S.-based business-to-business services
company and leading provider of compliance-based solutions that
protect people and brands, promote health and safeguard the
environment. Stericycle serves more than one million
customers in all 50 U.S. states and 18 countries worldwide with
solutions for regulated waste management, secure information
destruction, compliance, customer contact, and brand
protection. For more information about Stericycle, please
visit www.stericycle.com.
ABOUT HARSCOHarsco Corporation
is a global provider of environmental solutions for industrial
waste streams and innovative technologies for the rail sector.
Based in Camp Hill, PA, the 11,000-employee company operates in
more than 30 countries. Harsco’s common stock is a component of the
S&P SmallCap 600 Index and the Russell 2000 Index. Additional
information can be found at www.harsco.com.
Contact: Stericycle
Investor Relations847-607-2012
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