April 6, 2011 / 5:35 PM / 7 years ago

UPDATE 3-Clean Harbors eyes energy services with Peak Energy buy

* To pay C$0.95 per share, a 28 pct premium

* To assume net debt of C$35.0 million

* Sees deal adding to earnings immediately

* Clean Harbors shares up 6 pct to all-time high

* Peak Energy shares at 28-month high (Rewrites throughout with details, Clean harbor CEO comment; updates shares)

BANGALORE, April 6 (Reuters) - Clean Harbors Inc , traditionally an environmental cleanup services provider, said it would buy Peak Energy Services Ltd for C$161 million ($167 million) in cash — its second acquisition this year to grow in the energy services market driven by increased drilling for oil and gas.

Clean Harbors shares rose 6 percent to an all-time high of $106.57 on Wednesday. Its shares have risen 19 percent since it bought another Canadian energy services company, Badger Daylighting for C$222 million in late January.

With oil prices holding near two year-highs on unrest in oil exporting countries in the Middle East and Africa, there has been a rise in hunting for the commodity helping companies like Badger and Peak, which lease out equipment to drillers.

“By combining Peak and Badger together with our existing assets, we are building critical mass in the rapidly expanding energy services space,” Alan McKim, Clean Harbors’ chief executive officer said.

The company’s exploration segment, which offers land and air surveying, geospatial data imaging and directional boring services, has more than doubled in revenue in the past year, although it contributed just 3 percent of revenue in 2010.

Peak offers fluids storing tankers and hauling trucks as well as centrifuges, which separate substances of different densities, while Badger runs a fleet of 410 hydrovac units which use water and vacuum technology to blast through dirt and rocks to dig trenches. [ID:nSGE70P063]

Norwell, Massachusetts-based Clean Harbors has been posting strong results for the past three quarters driven mainly by revenue earned by offshore cleanup operations in the wake of BP Plc’s oil spill in the Gulf of Mexico last April. [ID:nSGE6A10LD]

Peak Energy’s Sanitherm unit — which builds, installs and operates package sewage treatment plants — will complement Clean Harbors’ technologies to treat liquid and semi-liquid hazardous and non-hazardous wastewater.

Clean Harbors will pay 95 Canadian cents for each Peak share — a 28 percent premium over the stock’s closing price on Tuesday — and assume about C$35 million of Peak’s net debt.

The deal is expected to close in the second quarter of this fiscal and immediately add to Clean Harbors’ earnings.

Peak Energy’s board, the company’s executives and its largest shareholder — Deans Knight Capital Management — are in support of the deal. They have a combined stake of 53.6 percent.

Peak Energy shares rallied as much as 28 percent to a 28-month high of 95 cents on Wednesday morning. They later shed some of those gains to trade up 26 percent at C$0.93 on the Toronto Stock Exchange.

Clean Harbors shares were up 5.4 percent at $105.3 Wednesday afternoon on the New York Stock Exchange. ($1 = 0.964 Canadian Dollars) (Reporting by Swetha Gopinath in Bangalore; Editing by Jarshad Kakkrakandy) (swetha.gopinath@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 580; Reuters Messaging: swetha.gopinath.reuters.com@reuters.net)

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