Vertex Sale to Safety-Kleen Progresses

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Vertex Energy shareholders voted in favor of its proposed sale of used motor oil collection and recycling assets – including two rerefineries – to Clean Harbors’ Safety-Kleen Systems subsidiary, but the U.S. Federal Trade Commission earlier made a second request for additional information about the deal, Vertex recently announced.

Clean Harbors would pay $140 million in cash to acquire Houston-based Vertex’s Heartland base oil rerefinery in Ohio, a second rerefinery in Louisiana and its used oil collection businesses under the agreement announced by the companies on June 29.

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Vertex had said the sale would allow it to redeploy capital into “energy transition assets of scale.” Clean Harbors had said the expansion of its rerefining network through the Vertex assets acquisition would enable it to further grow its presence in the renewable lubricants fuels markets while expanding its waste oil collection networks in a number of key states. At the time, the acquisition was expected to close in the third quarter, subject to approvals and conditions.

Based on a vote tally from a special meeting of shareholders held on Sept. 28, 99.9% of Vertex’s voting shareholders voted in favor of the asset divestiture, the company said in a Sept. 29 news release, representing about 56.8% of Vertex’s outstanding common stock as of the record date for the special shareholder meeting.

“Today’s shareholder vote reflects overwhelming support for our value creation strategy,” Vertex President and CEO Ben Cowart said in a news release.

As a result of the FTC’s second request, Vertex said in a Sept. 21 news release, “the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, during which the FTC is permitted to review the proposed transaction, will be extended for 30 days following the date that Vertex and Safety-Kleen have substantially complied with the request, unless that period is extended voluntarily by both parties or terminated sooner by the FTC.”

Vertex said it has cooperated fully with the FTC as it conducts its review of the proposed divestiture and will continue to do so in connection with the second request. In addition to the expiration of the waiting period under the HSR Act, the disposition remains subject to shareholder as well as other customary closing conditions.

Acquired by Houston-based Vertex in 2014, the Heartland rerefinery in Columbus has capacity to make 55,000 metric tons per year of API Group II base oils and can process up to 20 million gallons per year of waste oil. Clean Harbors, based in Norwell, Massachusetts, will also acquire a rerefinery in Marrero, Louisiana, which can process up to 69 million g/y of waste oil and produce vacuum gas oil.

The deal includes Vertex’s H&H and Heartland used oil collections business and 17 service branches throughout the Midwest and U.S. Gulf Coast region, supported by about 200 employees and a fleet of collection vehicles. Other assets that will be acquired include the Cedar Marine terminal in Baytown, Texas, and the Nickco oil filters and absorbent materials recycling facility in East Texas.

Clean Harbors has five base oil rerefineries in the United States and one in Canada.