BUSINESS COMBINATIONS

3 Months Ended

Mar. 31, 2013

Business Combinations [Abstract]

BUSINESS COMBINATIONS

BUSINESS COMBINATIONS

Safety-Kleen, Inc.

On December 28, 2012, the Company acquired 100% of the outstanding common shares of Safety-Kleen for approximately $1.3 billion. The purchase price consisted of an all-cash purchase price of $1.25 billion, plus a $7.3 million adjustment for the amount by which the estimated net working capital (excluding cash) of Safety-Kleen on the closing date exceeded $50.0 million. The purchase price is subject to adjustment upon finalization of Safety-Kleen's net working capital balance (excluding cash) as of the closing date. The Company incurred acquisition-related costs of approximately $1.2 million in connection with the transaction which are included in selling, general and administrative expenses in the consolidated statements of income for the three months ended March 31, 2013. The Company financed the purchase through a combination of approximately $300.0 million of existing cash, $369.3 million in net proceeds from the Company's public offering of 6.9 million shares of Clean Harbors common stock, and approximately $589.0 million in net proceeds from the Company's private debt offering of $600.0 million of 5.125% senior unsecured notes due 2021. Safety-Kleen, headquartered in Richardson, Texas, is the largest re-refiner and recycler of used oil in North America and a leading provider of parts cleaning and environmental services to commercial, industrial and automotive customers. In conjunction with the transaction, Safety-Kleen, Inc. and its subsidiaries became wholly-owned subsidiaries of Clean Harbors.

The fair value of all the acquired identifiable assets and liabilities summarized below is provisional pending finalization of the Company's acquisition accounting. Measurement period adjustments reflect new information obtained about facts and circumstances that existed as of the acquisition date. The Company believes that such preliminary allocations provide a reasonable basis for estimating the fair values of assets acquired and liabilities assumed but the Company is waiting for additional information necessary to finalize fair value. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable but no later than one year from the acquisition date. Final determination of the fair value may result in further adjustments to the values presented below. The following table summarizes the recognized amounts of identifiable assets acquired and liabilities assumed (in thousands).

	At December 28, 2012			Measurement Period Adjustments			At Acquisition Date (As Adjusted)
Inventories and supplies	$	102,339		$	6,537		$	108,876
Other current assets (i)	152,245			2,240			154,485
Property, plant and equipment	514,712			779			515,491
Permits and other intangibles	421,400			4,577			425,977
Other assets	4,985			(1,147		)	3,838
Current liabilities	(192,652		)	(2,910		)	(195,562		)
Closure and post-closure liabilities, less current portion	(15,774		)	10,201			(5,573		)
Remedial liabilities, less current portion	(38,370		)	(10,650		)	(49,020		)
Deferred taxes, unrecognized tax benefits and other long-term liabilities	(128,375		)	8,520			(119,855		)
Total identifiable net assets	820,510			18,147			838,657
Goodwill (ii)	436,749			(18,147		)	418,602
Total	$	1,257,259		$	—		$	1,257,259

_______________________

(i) The fair value of the assets acquired includes customer receivables with a preliminary aggregate fair value of $132.3 million. Combined gross amounts due were $142.2 million.

(ii) Goodwill represents the excess of the fair value of the net assets acquired over the purchase price. Goodwill of $206.7 million, $142.3 million, $67.5 million, and $2.1 million has been recorded in the Oil Re-refining and Recycling, SK Environmental Services, Industrial and Field Services and Technical Services segments, respectively. None of the goodwill related to this acquisition will be deductible for tax purposes.

The Company has determined that the separate disclosure of Safety-Kleen's revenues and earnings is impracticable for the three months ended March 31, 2013 due to the integration of Safety-Kleen operations into the Company upon acquisition.

Unaudited Pro Forma Financial Information

The following unaudited pro forma combined summary financial information presented below gives effect to the following transactions as if they had occurred as of January 1, 2011, and assumes that there were no material, non-recurring pro forma adjustments directly attributable to: (i) the acquisition of Safety-Kleen, (ii) the sale of 6.9 million shares of the Company's common stock, (iii) the issuance of $600.0 million aggregate principal amount of 5.125% senior unsecured notes due 2021, and (iv) the payment of related fees and expenses (in thousands).

	For the Three Months Ended
	March 31, 2012
Pro forma combined revenues	$	883,384
Pro forma combined net income	$	31,191

This pro forma financial information is not necessarily indicative of the Company's consolidated operating results that would have been reported had the transactions been completed as described herein, nor is such information necessarily indicative of the Company's consolidated results for any future period.

Other 2012 Acquisitions

The Company acquired (i) during the second quarter of 2012, all of the outstanding stock of a privately owned Canadian company which provides workforce accommodations, camp catering and fresh food services; (ii) during the third quarter of 2012, certain assets of a privately owned U.S. company that is engaged in the business of materials handling services that includes a variety of support equipment to provide customers with a sole source for any dredging and dewatering project; and (iii) during the fourth quarter of 2012, the shares and assets of certain subsidiaries of a privately owned company that is engaged in the business of providing catalyst loading and unloading services in the United States and Canada. The combined purchase price for these acquisitions was approximately $107.7 million, including the assumption and payment of debt of $7.7 million and post-closing adjustments of $0.9 million based upon the assumed target amounts of working capital. Management has determined the preliminary purchase price allocations based on estimates of the fair values of all tangible and intangible assets acquired and liabilities assumed. Such amounts are subject to adjustment based on the additional information necessary to determine fair values. The Company believes that such information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed, but the Company is waiting for additional information necessary to finalize fair value.

As of March 31, 2013, the Company had finalized the acquisition accounting of the identified acquired assets and liabilities for the acquisitions completed in the third quarter of 2012 and the second quarter of 2012. The Company has not finalized the acquisition accounting for the acquisition completed in the fourth quarter of 2012. The Company expects to finalize the remaining valuation and complete the purchase price allocation as soon as practicable but no later than one year from the acquisition dates. Final determination of the fair value may result in further adjustments to the values presented below (in thousands).

	At Acquisition Dates			Measurement Period Adjustments			At Acquisition Dates (As Adjusted)
Current assets (i)	$	20,270		$	324		$	20,594
Property, plant and equipment	51,901			(8		)	51,893
Customer relationships and other intangibles	21,770			—			21,770
Other assets	53			4			57
Current liabilities	(5,277		)	(179		)	(5,456		)
Other liabilities	(5,133		)	(73		)	(5,206		)
Total identifiable net assets	83,584			68			83,652
Goodwill (ii)	23,956			129			24,085
Total	$	107,540		$	197		$	107,737

______________________

(i) The preliminary fair value of the financial assets acquired included customer receivables with an aggregate fair value of $13.0 million. Combined gross amounts due were $13.5 million.  

(ii) Goodwill represents the excess of the fair value of the net assets acquired over the purchase price attributed to expected operating and cross selling synergies. The goodwill has been assigned to the Industrial and Field Services segment and will not be deductible for tax purposes.

The following unaudited pro forma combined financial data presents information as if the 2012 acquisitions had been acquired as of January 1, 2011 and assumes that there were no material, non-recurring pro forma adjustments directly attributable to those acquisitions. The pro forma financial information does not necessarily reflect the actual results that would have been reported had the Company and those three acquisitions been combined during the periods presented, nor is it necessarily indicative of the future results of operations of the combined companies (in thousands).

	For the Three Months Ended
	March 31, 2012
Pro forma combined revenues	$	607,482
Pro forma combined net income	$	36,098

Acquisition related costs of $0.2 million for the other 2012 acquisitions were included in selling, general and administrative expenses in the Company's consolidated statements of income for the three months ended March 31, 2013.