Clean Harbors (CLH) Should Sell Non-Core Businesses - Wunderlich
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Price: $201.02 --0%
Rating Summary:
20 Buy, 7 Hold, 0 Sell
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Today's Overall Ratings:
Up: 11 | Down: 9 | New: 14
Rating Summary:
20 Buy, 7 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 9 | New: 14
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Wunderlich Securities reiterated a Buy rating on Clean Harbors (NYSE: CLH) with a price target of $60.00. Analyst Michael E. Hoffman thinks a strategic review should lead to a sale of non-core businesses.
"Two businesses standout as not directly relevant to the focus: Lodging in Industrial/Field Services and Seismic in Oil & Gas. Lodging, including the manufacturing arm is about $210mm in sales. Seismic and Right-of-Way services is about a $90mm to $100mm in sales. We would not include the re-refining operations as it does fit the focus list," said Hoffman.
"For sale: $210mm Canadian Lodging and manufacturing operation. Lodging was part of the income trust, Eveready, which CLH bought in 2009. It has grown since both units deployed and with the addition of a lodge manufacturer. The most recent addition is the 600 en-suite Ruth Lake Lodge. We estimate about $70mm FY13 EBITDA. The basis for valuation will come with the 100% spin-out of the FY13 $428mm EBITDA Accommodations segment by Oil States International (OIS-NR), which would be the ideal strategic buyer as well.," continued the analyst.
"For sale: leading Canadian Seismic and Right-of-way Services company with $90mm to $100mm of sales. What is the value of this business? We suspect given its unrivaled map portfolio, "A-list" client base, and number one market share position that 6-7x EBITDA is a floor valuation. We estimate this business generates $18mm-$19mm in EBITDA, putting a $110mm to $130mm value on Seismic. While it may provide some early insight to future drilling activity, Seismic does not drive volumes to the fixed asset base," he added.
For an analyst ratings summary and ratings history on Clean Harbors click here. For more ratings news on Clean Harbors click here.
Shares of Clean Harbors closed at $53.76 yesterday.
"Two businesses standout as not directly relevant to the focus: Lodging in Industrial/Field Services and Seismic in Oil & Gas. Lodging, including the manufacturing arm is about $210mm in sales. Seismic and Right-of-Way services is about a $90mm to $100mm in sales. We would not include the re-refining operations as it does fit the focus list," said Hoffman.
"For sale: $210mm Canadian Lodging and manufacturing operation. Lodging was part of the income trust, Eveready, which CLH bought in 2009. It has grown since both units deployed and with the addition of a lodge manufacturer. The most recent addition is the 600 en-suite Ruth Lake Lodge. We estimate about $70mm FY13 EBITDA. The basis for valuation will come with the 100% spin-out of the FY13 $428mm EBITDA Accommodations segment by Oil States International (OIS-NR), which would be the ideal strategic buyer as well.," continued the analyst.
"For sale: leading Canadian Seismic and Right-of-way Services company with $90mm to $100mm of sales. What is the value of this business? We suspect given its unrivaled map portfolio, "A-list" client base, and number one market share position that 6-7x EBITDA is a floor valuation. We estimate this business generates $18mm-$19mm in EBITDA, putting a $110mm to $130mm value on Seismic. While it may provide some early insight to future drilling activity, Seismic does not drive volumes to the fixed asset base," he added.
For an analyst ratings summary and ratings history on Clean Harbors click here. For more ratings news on Clean Harbors click here.
Shares of Clean Harbors closed at $53.76 yesterday.
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