Safety-Kleen IPO Overview

Sep.28.08 | About: Safety-Kleen, Inc. (SFYK)

Safety-Kleen (SK) is North America's leading provider of used oil recycling and parts cleaning.

All quotations are from the company’s most recent S-1 filing, with links provided

Business Overview (from prospectus)

Safety-Kleen is the largest provider of used oil re-refining and recycling and parts cleaning services in North America, and is also a market leader in providing a comprehensive set of other environmental solutions, such as used oil collection, containerized waste services, vacuum services and total project management services. Our broad set of environmentally-responsible products and services ensures the responsible collection, processing, re-refining, recycling and third-party disposal of hazardous and non-hazardous materials. Our North American network (including branches, recycling centers, distribution centers, oil terminals, accumulation centers and re-refineries) is the largest in the industry, consisting of over 200 facilities in the United States, Canada and Mexico and logistics capabilities supported by a fleet of trucks, rail cars and barges.

Offering: 21.9 million shares at $15.00 - $17.00 per share. Net proceeds of approximately $67.9 million will be used for general corporate purposes, including to fund working capital and capital expenditures and possibly to make acquisitions.

Lead Underwriters:  Merrill Lynch, J.P. Morgan, Citi

Financial Highlights: 

Revenues for the 28 weeks ended July 12, 2008 increased $81.0 million, or 14.5%, to $640.6 million from $559.6 million for the 28 weeks ended July 14, 2007, primarily due to volumes, prices and the effects of a weaker U.S. dollar ($8.5 million) compared to the Canadian dollar. Oil services and products contributed $60.0 million, or 74.1%, of the increase, resulting from a $60.1 million increase in oil and oil products revenues...    Operating expenses for the 28 weeks ended July 12, 2008 increased $68.0 million, or 14.7%, to $532.5 million from $464.5 million for the 28 weeks ended July 14, 2007.


In each of our primary service offerings, the sources of competition vary by locality and by type of service rendered, with competition coming from smaller regional or local competitors that offer various environmental solutions. Our main competitors in our oil services offerings are Evergreen in California and Newalta in Vancouver, Canada and our main competitor in industrial cleaning services is Heritage-Crystal Clean in the eastern half of the United States. The principal methods of competition for all of our services are quality of service, price, efficiency, safety and innovative products. We believe our smaller customers are more sensitive to price than the other factors on which we compete. Consequently, while we believe our size and expertise provides advantages to our customers who use our services, we can lose customers to competitors who compete primarily on price.

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