US Ecology and NRC Group Agree to Merge

NRC Group (NRCG), formerly Hennessy Capital Acquisition Corp. III, which was Daniel Hennessy’s third SPAC, announced this morning that it has entered into a definitive merger agreement with US Ecology, Inc. (Nasdaq-GS: ECOL), in an all-stock transaction with an enterprise value of $966 million.

NRCG common stockholders will receive 0.196 shares of common stock of the new holding company for each share of NRCG common stock they own upon closing of the transaction.  The exchange ratio represents a price of $12.00 per share of NRCG stock, based on the US Ecology average share price over the last 15-trading days.  Additionally, the $12.00 price per share represents a premium of approximately 36% to NRCG’s June 21, 2019 closing price of $8.83.

Upon completion of the transaction, US Ecology stockholders will own approximately 70% of the combined company, and NRCG stockholders will own approximately 30% on a fully diluted basis. Furthermore, the combined company will use the US Ecology name, and its shares will continue to be listed on the Nasdaq Global Select Market under the ticker ECOL.

US Ecology, Inc. is a leading North American provider of environmental services to commercial and government entities. The company addresses the complex waste management needs of its customers, offering treatment, disposal and recycling of hazardous, non-hazardous and radioactive waste, as well as a wide range of complementary field and industrial services. While NRCG is one of two leading national Oil Spill Removal Organizations (“OSRO”) that provide mandated standby emergency response for the transportation of oil products.  With more than 50 service centers, NRCG has a national service network providing emergency and spill response, light industrial services, hazardous and industrial waste management and transportation services.

This is much needed great news for SPACs and we’re looking forward to seeing what Hennessy IV has in store as a follow-up transaction.

Conference Call

US Ecology, Inc. will hold an investor conference call on Monday, June 24, 2019 at 9:00 a.m. Eastern Daylight Time to discuss this acquisition.  Questions will be invited after management’s presentation. Interested parties can join the conference call by dialing (877) 512-4138 or (412) 317-5478.

The conference call will also be broadcast live on US Ecology’s website at www.usecology.com .  An audio replay will be available through July 1, 2019, by calling (877) 344-7529 or (412) 317-0088 and using the passcode 10132865. The replay will also be accessible on US Ecology’s website at www.usecology.com.

Terms of the Transaction

• US Ecology stockholders will receive 1 share of common stock of the new holding company for each share of US Ecology common stock they own upon closing of the transaction.
• NRCG common stockholders will receive 0.196 shares of common stock of the new holding company for each share of NRCG common stock they own upon closing of the transaction.  The exchange ratio represents a price of $12.00 per share of NRCG stock, based on the US Ecology average share price over the last 15-trading days.  The $12.00 price per share represents a premium of approximately 36% to NRCG’s June 21, 2019 closing price of $8.83.
• NRCG’s 19.249 million outstanding Warrants to purchase NRCG common stock will be converted to 3.773 million Warrants to purchase common stock of the new holding company, with a strike price of $58.67 each.
• US Ecology will refinance NRCG’s existing senior credit facilities through a new Term Loan B. Wells Fargo Securities, LLC and Bank of America Merrill Lynch, have agreed to provide committed financing for the transaction. The transaction is not subject to a financing contingency.

Advisors

• Bank of America Merrill Lynch and Houlihan Lokey are serving as US Ecology’s financial advisors and Dechert LLP is serving as legal counsel.
• Evercore is serving as NRCG’s financial advisor and Jones Day is serving as legal counsel.
• Wells Fargo Securities, LLC and Bank of America Merrill Lynch are acting as Joint Lead Arrangers for the financing.