Norwell, Mass.-based Clean Harbors said in a news release Monday that the acquisition benefits it in three key ways: it expands its geographic footprint in rerefining to include coverage in the Western United States, complementing its existing Safety-Kleen rerefineries in East Chicago, Ind., and Breslau, Canada; it includes the second-largest collector of waste oil in California; and it provides a number of valuable ancillary waste assets. Evergreen has approximately 200 employees.

In addition to the rerefinery, the purchase includes equipment and vehicles used to collect used oil from customer sites, a diverse roster of West Coast customer accounts, an ancillary hazardous waste business and a permitted [treatment, storage and disposal facility] in Carson, Calif., which Clean Harbors Chairman and CEO Alan McKim pointed out is a state where stringent permitting requirements create barriers to entry.

McKim said the company believes the purchase price was favorable for Clean Harbors shareholders. While we plan to invest some capital into the rerefinery to enhance its layout and productivity, the plant is relatively new, with major portions of it having been rebuilt following a fire at the facility in 2011, he said.

Jim Buckley, Clean Harbors senior vice president for investor relations and corporate communications, said the company is aware of past incidents at Evergreens Newark facility and has multiple plans in place to mitigate the potential for any additional issues right from the beginning. These plans include conducting comprehensive inspections and testing throughout the facility, and we will be implementing a new maintenance system, Buckley told Lube Report. Both Clean Harbors and Safety-Kleen have strong safety records at our facilities, and we will be applying our know-how in terms of systems, processes and procedures to the acquired Evergreen locations, including the rerefinery.

He explained that the pay-for-oil (PFO) cost for waste oil in California is significantly lower than the national average because the waste oil has been designated as hazardous and there are tax incentives available in the state for the generators of it to recycle it. One of our objectives in our rerefining business is to reduce our PFO costs by seeking out geographies with lower cost waste oil, Buckley said. Entering the California market directly supports that strategy.

He added that California is an attractive market for Clean Harbors, because we already have a large footprint in the state and a number of locations out there, such as our Buttonwillow landfill. We service many customers on the environmental side in California across a number of [vertical markets].

Clean Harbors acquired Safety-Kleen for $1.25 billion in December 2012. Safety-Kleens East Chicago, Ind., rerefinery has 800 b/d of Group I and 4,200 b/d of Group II capacity. Its rerefinery in Breslau, Canada, has capacities of 700 barrels per day of Group I and 1,200 b/d of Group II.