H.I.G. Capital Acquires Thermo Fluids, Inc.
2/20/2001 – H.I.G. Capital, a Miami-based private equity firm, has acquired Thermo Fluids, Inc. (“TFI”), a leading producer of fuel oil and other oil based products from recovered oil and oily wastes in the intermountain west region of the United States. Headquartered in Phoenix, Arizona, the Company operates eight fully permitted storage and processing facilities located strategically within its operating region. The company services a customer base of approximately 17,000 different customers throughout the geographic region spanning from New Mexico to Oregon. TFI provides services to its customers that require the disposal of used oils and fuel products, oily wastewater, glycol (antifreeze), used oil filters, absorbents and oily solids. Used oil is collected, processed (or recycled) and then marketed to end-users as an alternative fuel source to diesel oil and natural gas.
TFI was founded in 1993 by ThermoRetec, a subsidiary of Thermo Electron Corporation (NYSE: TMO), to provide liquid resource recovery management services for commercial and industrial customers that generate non-hazardous used oil and oil contaminated water from their operations. TFI’s customers are required by environmental regulation to ensure the safe disposal of such liquids. They rely on TFI to test and collect the material so the customers can concentrate on their core businesses.
In addition to its transportation and recycling activities, the Company’s technical services group performs a variety of environmental management services, including on-site waste sampling and analysis, petroleum tank cleaning, and emergency response operations. These services complement TFI’s recycling activities and differentiate it from its competition.
The estimated size of the U.S. oil recovery market is approximately $1 billion, of which $400 million stems from the collection of used oil and associated services and $600 million is generated by the sale of recovered oil products. Demand in both these segments is loosely linked to the overall level of domestic economic activity; increasing population, automobile usage and infrastructure construction are expected to drive market growth at a compound annual rate of 8%. Competition in the market is fragmented with thousands of companies believed to be competing in the United States and the top ten firms controlling approximately half of the market. A number of medium-sized firms compete regionally, with the vast majority of competitors being small local companies with non-professional management and limited financial resources.
Ian Hislop, CEO of TFI indicated: “The business, environmental and economic fundamentals of the used oil recovery and recycling market are soundly based and sustainable. TFI will benefit from increased demand for its products as a viable, more economical source of BTU’s for the industry compared to virgin oil products and natural gas. TFI is particularly well placed in some of the fastest growing regional markets in the U.S. and, as such, expects to see continued growth at a rate in excess of the market. We are pleased that H.I.G. Capital is now a major investor in TFI and we look forward to accelerating the company’s growth with their involvement.”
About H.I.G. Capital
H.I.G. Capital, which targets the acquisition of profitable companies with revenues of up to $250 million, as well as growth capital investments in early stage, technology companies, currently has over 40 investments with combined revenues in excess of $3 billion.