It's not all hurricane all the time. I'm looking at this Clean Harbors (CLH) deal to buy Safety-Kleen, and I am convinced this is a good one for Clean Harbor. It's the same reason so many takeouts are good for the acquirers: They add secular growth to what are viewed as cyclical businesses.
Until Clean Harbors bought Safety-Kleen for $1.25 billion Monday, people had been leaving the stock. They had come to believe it wasn't leveraged to clean up and to waste disposal, and that it had instead become a rig-count play, since a great deal of business had been developed in the oil patch.
But this deal augments Clean Harbors' less-than-cyclical businesses and gives the company a chance to expand in a world where regulation on waste disposal is poised to become tighter and tighter.
I think that, when the market opens, the bears on the stock are going to have to take a hard look at their negative thesis and change their minds. When you have a new-customer list of 200,000 that's not in the oil patch, and when you are refining waste oil into product, you have a much better business mix.
Safety-Kleen was supposed to come public this August, but it didn't get through the chute. That's looking like good news now for both companies.
