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Clean Harbors (CLH) Divests Transformer Business to Emerald

Waste management services provider Clean Harbors, Inc.CLH recently inked a definitive agreement to divest the Transformer Services Group for an undisclosed amount. Emerald Transformer, a division of Versatile Processing Group, Inc., an Insight Equity portfolio company, will acquire this business division.

With over four decades of experience in the transformer services industry, Emerald has formed a niche market with dedicated services for electrical equipment. These include specialty services like transformer repair, large transformer decommissioning, field technical services, refurbished equipment sales, oil processing and PCB (polychlorinated biphenyl) disposal among others. The acquisition will extend Emerald's geographic footprint and enable it to better serve its customers with the addition of five facilities across the country.

Clean Harbors' Transformer Services Group offers comprehensive transformer services for utility, refinery, steel production and other large manufacturing customers. These include a gamut of speciality services such as on-site services, power and substation services, specialized transportation and emergency response, as well as recycling, recovery and disposal. The on-site services include transformer sampling, retrofitting and retrofilling, recycling, reclaiming and disposing of waste oils, PCBs and other hazardous and non-hazardous components.

In addition, Clean Harbors fully manages transformer and oil-filled electrical equipment assets using a Web-based bar code tracking inventory management system that keeps track of transformer specifications, locations and other data, as well as service records. It also provides emergency response services using Clean Harbors' comprehensive emergency response capabilities to support utilities and other industries in the event of natural disasters, transformer failures, and oil and fluid spills. The transaction, therefore, will offer an unrivalled competitive advantage to Emerald with such well-established lines of businesses.

In turn, the divesture will facilitate Clean Harbors to focus on its core businesses. Incidentally, the stock has underperformed the Zacks categorized Waste Removal Services industry with an average year-to-date decline of 0.5% as against a gain of 8.1% for the latter. Volatility in fuel prices and new policies are rapidly transforming the American energy sector, while escalating tensions in the Middle East are clouding the global oil picture. The company's exploration, drilling activity and production are largely dependent upon the operation of oil rigs and future price uncertainties that has resulted in lower activity levels, impacting the business' results.

Clean Harbors currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader industry include Advanced Disposal Services, Inc. ADSW , Stericycle, Inc. SRCL and Exponent, Inc. EXPO , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Advanced Disposal Services topped earnings estimates thrice in the trailing four quarters with a stellar positive surprise of 227.8%.

Stericycle has a long-term earnings growth expectation of 9.1%. It topped estimates thrice in the trailing four quarters with an average positive earnings surprise of 4.4%.

Exponent has a long-term earnings growth expectation of 12%. It topped estimates twice in the trailing four quarters with an average positive earnings surprise of 1.1%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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