Heritage-Crystal Clean agrees to be acquired by private equity firm

An investment affiliate of J.F. Lehman & Company (JFLCO), a leading private equity investment firm focused on the aerospace, defense, maritime and environmental sectors, has agreed to purchase Heritage-Crystal Clean, Inc., a leading provider of parts cleaning, hazardous and non-hazardous waste services, used oil re-refining, antifreeze recycling, industrial and field services, and emergency and spill response services.

The transaction is expected to close in the fourth quarter of 2023, subject to customary closing conditions

The all-cash transaction values Crystal Clean at approximately USD1.2 billion.

Fully committed debt financing in support of the transaction is being provided by Jefferies Finance LLC and Sumitomo Mitsui Banking Corporation. The merger is not subject to any financing condition.

Under the terms of the merger agreement, JFLCO will acquire all the outstanding shares of Crystal Clean for USD45.50 per share in cash. The purchase price represents a premium of approximately 24.9% to Crystal Clean’s 60-day volume-weighted average price on July 19, 2023.

“We are pleased to enter into this agreement with JFLCO, which we believe represents the best path forward for Crystal Clean to maximise value for our shareholders,” said Crystal Clean’s President and CEO, Brian Recatto. “For more than 20 years, we have executed on our mission and thoughtfully grown Crystal Clean to become the partner of choice nationwide for premier environmentally-sustainable solutions that have a tangible impact for customers, and we are excited to embark on this new chapter.”

“As a private company, we will have added flexibility and a deeply knowledgeable partner in JFLCO that understands our strengths and employee-empowered culture. We are grateful to our talented team, who have been instrumental in establishing Crystal Clean as the leader we are today and look forward to building on our momentum on the path ahead,” Recatto said.

“At a time when businesses across industries are more environmentally conscious and highly focused on running cleaner, we are excited to partner with Crystal Clean – a clear category leader and unparalleled provider of environmental and waste disposal services,” said Glenn Shor, partner at J.F. Lehman & Company. “This partnership underscores our confidence in Crystal Clean’s business, vision and reputation as a trusted provider for a diversified, blue-chip customer base. We look forward to working closely together to best position the Company for sustainable, long-term success.”