US Ecology has occupied the waste and environmental services space since it was founded as a nuclear engineering company specializing in low-level radioactive waste disposal in 1952. As the Boise, Idaho-based company expanded and the U.S. Environmental Protection Agency (EPA) developed the Resource Conservation and Recovery Act (RCRA) regulatory framework in 1976, the company subsequently broadened its hazardous waste disposal service offerings to help its customers maintain compliance. Over the last several decades, US Ecology has amassed a number of hazardous waste landfill, treatment and recycling assets, which have positioned the company to become an industry leader for customers in the manufacturing, refining, utilities, mining, remediation, retail, transportation and environmental services sectors.
Today, the company operates five hazardous waste landfills, one radioactive waste landfill, 23 treatment and recycling centers, and 28 service centers and satellite locations throughout North America to manage its customers’ hazardous and nonhazardous waste disposal and recycling needs. Among the materials the company is charged with disposing are polychlorinated biphenyls (PCBs), per- and polyfluoroalkyl substances (PFAS), certain radioactive wastes including naturally occurring radioactive material (NORM) and technologically enhanced naturally occurring radioactive material (TENORM), as well as a variety of industrial wastes.
Jeff Feeler joined the company in 2006 as vice president and chief analytics officer before being elevated to chief financial officer in May 2007. Feeler was promoted to president and chief operating officer in 2012, and by 2013, he dropped the COO title and added CEO in its place.
According to Feeler, the company is looking to build off the $565,900,000 in revenue it generated in 2018 through a combination of organic investments and strategic merger and acquisition (M&A) initiatives, the latter of which was recently highlighted by a merger with Houston-based NRC Group (which is slated to close in the fourth quarter of 2019).
“We have achieved significant growth to where we are today—on track for $600 million in sales in 2019 with pro forma $1 billion in annualized revenue once the NRC merger is closed,” Feeler says.
Feeler says the company’s treatment, recycling and disposal operations currently represent 70 percent of its revenues, while its field and industrial services approximate the rest.
“While we handle a variety of services for our customers—including recycling, transportation and collection—disposal and processing services are our historic focus,” he says. “We have a significant collection capability that continues to grow and gain share in the industry. Our recent focus has been on delivering on our vision of being the premier provider of comprehensive environmental services, including providing a best-in-class set of field and industrial services along with our core disposal assets.”
Feeler notes that US Ecology has diversified its range of customers as it has expanded its service portfolio. While its base once consisted mainly of large industry, mining, refining, environmental service providers and government entities, it now includes retailers, smaller industry, schools and universities.
Eyes on opportunity
Over the past year, US Ecology has strengthened its position in the market through the acquisition of several companies, including ES&H Dallas, Ecoserv Industrial Disposal and WISE Environmental Services. But the move that really telegraphs the company’s intent to bolster its operations is the proposed merger with NRC Group, which was first announced in June.
According to Feeler, the all-stock transaction with an enterprise value of $966 million positions the company to move into unchartered waters.
“Our customer base will evolve as, and where, there are environmental needs that we have the assets and expertise to help address,” he says. “This will include expanding our audience to include more marine and exploration and production (E&P) industry customers once the NRC merger closes. Specifically, the NRC Group merger will bring significant new and strengthened capabilities to US Ecology, including industry-leading emergency response services such as standby marine services for the oil and gas transport industry, leading specialized response capabilities for high-risk response needs, E&P oil field waste disposal services that expand our disposal footprint, and international response and standby capabilities.”
On the company’s recent second quarter earnings call, Feeler said that the complementary nature of the two companies was what originally caught the attention of US Ecology.
“What got us interested in NRC is their domestic environmental services group, the network that they have and how it complements what we have, and that the services they provide are different services than what US Ecology provides,” Feeler said on the call. “So, there’s a true complement between the companies where we can leverage one another’s network and build out going forward. The opportunity for incremental growth and the ability to provide services to even more customers is the most exciting part of the business.”
Feeler continued, “The added benefits of protecting human health and the environment, and doing our part to make our communities safer, are simply more of a driver to continue to grow.”
"What got us interested in NRC is their domestic environmental services group, the network that they have and how it complements what we have, and that the services they provide are different services than what US Ecology provides.” –Jeff Feeler, CEO, US Ecology
Feeler says once the two parties expressed mutual interest, the deal came together rather quickly due to the compatibility between both groups, as well as the positive economic environment.
“Our M&A strategy is to apply a disciplined approach to identifying strategic assets that support our vision of being the premier provider of environmental services,” he says. “NRC is looking for a strategic sale, the economy is healthy, and we are well-positioned with strong financial performance and the ability to use equity to finance the transaction. Additionally, the two companies are very well aligned with very few redundant capabilities. Adding NRC’s leadership in both land and marine response to our disposal capabilities will help the combined company be the compliance and response industry leader.”
While the NRC transaction will be a blockbuster for the company, Feeler recently said during the company’s second quarter earnings call that it was structured in a way so as not to preclude future deals.
“One of the reasons why we are structuring the NRC transaction the way we are is the leverage profile will be very low in the grand scheme of things, and it gives us opportunities to pursue other assets that become available in the marketplace,” Feeler said on the earnings call. “If another company fits with our strategy, and if they are good assets that help us build out what we’re trying to create here, the proposed NRC deal won’t prevent us from pursuing it.”
Although Feeler went on to say the company is going to be “selective and very disciplined” when it comes to M&A activity, he also says it is keeping an eye on what opportunities exist in the market.
“We will continue to drive growth by seeking out opportunities to deploy capital in our existing operations to offer new or expanded services and innovative solutions,” Feeler says. “Supplementing our ongoing organic investments will be our ability to take advantage of strategic acquisitions as they come to market.”
Building from within
According to Feeler, the company’s capacity to collect, process and dispose of a variety of different volumes and types of materials has helped the company distinguish itself.
“We have significant disposal capabilities operating highly engineered RCRA subtitle C landfills. This capability, paired with our waste treatment and recycling capabilities, allows us to support a wide variety of customer needs,” he says. “Additionally, we have state-of-the-art recycling capabilities for many streams, including recoverable organics; metals streams, including catalyst, nickel and tin; and solvents, including glycol and N-methyl-2-pyrrolidone (NMP) from lithium-ion batteries. We are also in the process of deploying an industry-leading aerosol recycling technology that will further enhance our offerings and allow us to provide the most sustainable solutions in the marketplace.”
The company’s substantial processing capacity is made possible, in part, by US Ecology’s investment in its fleet operations. According to Feeler, the company employs rail service and more than 1,000 trucks to handle the waste the company is charged with disposing.
“Our transportation capabilities are designed to support a wide variety of needs, including rail and truck capabilities to support large-scale cleanup projects, collection services for our base industrial customers and small-quantity waste services with less-than truckload capabilities,” he says.
Due to the scope and hazardous nature of the material the company handles, Feeler says safety and adherence to strict regulatory protocols are paramount for the company’s entire staff of more than 1,700.
"Additionally, we have state-of-the-art recycling capabilities for many streams, including recoverable organics; metals streams, including catalyst, nickel and tin; and solvents, including glycol and N-methyl-2-pyrrolidone (NMP) from lithium-ion batteries.” –Jeff Feeler, CEO, US Ecology
“Ensuring safety and compliance is at the heart of what we do each and every day. This is supported by our team of experts as well as our assets and capabilities,” he says. “Our training programs address the services and tasks we perform and include rigorous safety training and programs, RCRA/HAZWOPER [hazardous waste operations and emergency response] training, DOT [department of transportation] training, along with functional training and development and management training.”
Feeler says US Ecology’s regulatory team works closely with all divisions of the business to ensure it is on top of the latest developments. The company also takes a leadership position within a variety of environmental trade associations, Feeler says, to stay informed on emerging trends.
It’s this emphasis on in-house compliance that’s been instrumental in conveying US Ecology’s value proposition to its customers, Feeler notes.
“By providing safe and responsible solutions for our customers each day, we help them meet their compliance and environmental goals,” Feeler says. “That’s why we focus on identifying innovative practices and sustainability programs for our customers to help them reduce and recycle waste and manage their environmental needs more efficiently. We all have a responsibility to protect the communities we live and operate in, and our services allow our customers to do their part with confidence and peace of mind.”
The correlation between the strength of US Ecology’s personnel and the quality of service it offers its customers is the central reason why the company emphasizes building from within, Feeler explains.
“Our business philosophy is founded in building the best team in the industry that is guided by a strong values system. This ensures we deliver on our critical mission to help protect the environment and deliver service excellence,” he says. “Our focus on team and investing for the long term is vital. We employ a companywide shared values system that provides a common compass for our entire team. This sets us apart from the competition.
“Building this type of organizational health enables us to win as we encounter different challenges and opportunities moving forward. It positions us to offer the best solutions available in the market and ensures that they are delivered with service excellence.”