Enviri is exploring a potential sale of Clean Earth six years after it acquired the company, executives said during an earnings call on Tuesday. The announcement comes as other divisions of the company drag on earnings and Enviri’s board of directors looks to improve the company’s value in public markets.
“As we seek to close the persistent gap between Enviri’s public market valuation and the company’s sum-of-the-parts value, the board has authorized a comprehensive review of strategic alternatives,” Enviri Chairman and CEO Nick Grasberger said in a release. “We are approaching this process with clarity, discipline, and an open mind, assisted by our outside advisors and guided by our commitment to maximize shareholder value.”
Clean Earth, which previously grew under private equity ownership, provides a range of hazardous and specialty waste services to commercial, industrial and residential markets. When Enviri, previously known as Harsco, acquired Clean Earth in 2019, it was considered one of the largest service providers of its kind in the country.
Grasberger said Enviri couldn’t disclose many details of the potential sale, and did not give a timeline on the company’s earnings call Tuesday, but he noted that the company would pursue all available options.
Enviri acquired Clean Earth from Compass Group Diversified Holdings for $625 million. The business brought in a substantial portfolio of specialty waste processing infrastructure. It had 27 facilities at the time of the acquisition, including nine hazardous waste treatment, storage and disposal facilities. In 2020, Enviri added to Clean Earth's portfolio by acquiring Stericycle’s environmental solutions business for $462.5 million.
The company transitioned to deriving 100% of its revenue from environmentally focused business by 2023. The Clean Earth division has outperformed other business segments in Enviri in recent years, particularly Harsco Rail. The company previously tried to divest its rail assets, but paused that process early last year due to outstanding contracts in Europe, Grasberger told analysts.
Over the past year, the company has considered other levers to boost revenue amid a slumping steel market affecting demand for Harsco Environmental’s services and other macroeconomic headwinds. That includes divestitures — in August 2024, the company sold Reed Minerals to Speyside Equity for $45 million.
There has also been a shuffle in leadership. At the start of the fiscal year, Enviri announced that two directors with more than 10 years of tenure retired from its board, including the former lead independent director David Everitt. Nicholas Fanandakis, the former CFO of DuPont, was nominated to join the board at that time.
The environmental services and specialty waste industry segments have seen strong valuations over the past year. GFL sold a majority stake in its environmental services business for approximately $5.6 billion earlier this year. Triumvirate also recently received an investment from Berkshire Partners that valued the company at $1.8 billion. And WM acquired Stericycle for $7.2 billion late last year, absorbing one of the largest medical waste service providers.
Grasberger expressed confidence in Enviri’s underlying business, noting that the company would continue to improve the rail business and that Harsco Environmental “is a market leader with unmatched service capabilities and a strong earnings and cash flow profile.”
“Clean Earth is an especially valuable business and in an attractive and consolidating industry,” Grasberger said. “With that said, we think there may be alternatives to unlock this value sooner.”
