This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Heckmann Corporation And Power Fuels To Merge Creating A Leading Environmental Services Company Focused On Energy And Industrial End-Markets

Stocks in this article: HEK

Heckmann Corporation (NYSE: HEK) (the “Company”) today announced that it has entered into a definitive agreement (“the Agreement”) with Mark Johnsrud, founder and owner of Badlands Energy, LLC, a North Dakota limited liability company doing business as Power Fuels (“Power Fuels”), to merge with Power Fuels, a privately held North Dakota-based environmental services provider focused on the transportation, treatment, recycling, and disposal of fluids at Power Fuels’ sites. Power Fuels is the largest environmental services company in the Bakken Shale basin, a premier unconventional oil shale. The business combination accelerates Heckmann’s strategy of providing a one-stop-shop for comprehensive environmental solutions. The merger is expected to be highly accretive to Heckmann’s earnings per share and is expected to close in the fourth quarter of 2012. The Agreement, and completion of the merger, is subject to customary regulatory approvals, such as filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and customary closing conditions including the approval of Heckmann’s stockholders, which is required under NYSE listing standards to issue shares in connection with this transaction.

Through June 30, 2012, Power Fuels generated trailing 12-month revenues of approximately $363.5 million and trailing 12-month adjusted EBITDA of approximately $154.7 million 4. Under terms of the Agreement, Heckmann plans to pay $125.0 million in cash and 95.0 million shares of the Company’s common stock 5, subject to, among other things, a two-year lockup agreement and a two-year standstill agreement. Heckmann will also assume/refinance approximately $150 million in Power Fuels’ debt. The Company is in discussions with its current lending group to expand the size of its credit facility to accommodate the transaction.

The transaction significantly expands Heckmann’s total environmental solutions operations. The business combination is expected to double Heckmann’s annual revenue, extend its geographic reach and broaden Heckmann’s customer base. The combined Company will continue to expand its environmental service offering by leveraging the respective strengths of each organization, including the recently acquired Thermo Fluids Inc. business with its environmental recycling expertise. The combination is expected to create value for the stockholders through:

  • Immediately and materially increasing earnings per share;
  • Providing immediate access to the fast growing and oil-focused Bakken Shale area and expanding the Company’s leverage to oil – on a pro-forma combined basis, over 70% of current shale-related revenues are derived from oil and liquids basins;
  • Continuing to expand the recurring-revenue base of the Company;
  • Establishing an industry-leading management team by combining the Power Fuels team and their extensive operating expertise with the existing Heckmann team;
  • Creating a Company with a leading presence and nationwide customer support network in all major shale areas including the Bakken, Haynesville, Marcellus, Eagle Ford, Permian and Utica;
  • Leveraging complementary and significant operating and tax benefits; and,
  • Providing additional cash flow generation to support future growth.

On a pro-forma basis, after giving effect to the cash and refinanced debt of the transaction, the combined Company’s leverage ratio would have been reduced to approximately 2.6 times trailing 12-month adjusted EBITDA as of June 30, 2012.

1 of 8

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,614.81 +215.14 1.31%
S&P 500 1,941.28 +37.27 1.96%
NASDAQ 4,419.4780 +103.4040 2.40%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs