EnergySolutions, known just last week
as Envirocare of Utah, fleshed out its plans Tuesday to be a full-service
nuclear waste company.
The Salt Lake City company bought Columbia, Md.-based Duratek Inc. for $396
million. With the deal, EnergySolutions achieves in one day on a national
scale what it had tried unsuccessfully to accomplish in its home state for
years: a big expansion and a license to dispose of hotter low-level radioactive
waste, though not in Utah.
Once the deal is approved by Duratek shareholders and government regulators,
EnergySolutions will have more than doubled its employees to 2,200 and revenues
to around $600 million a year.
EnergySolutions also will have assumed control over one of its two commercial
rivals in the low-level radioactive waste business, the company that operates
the Barnwell, S.C., disposal site for Classes A, B and C waste. Under state
law, the mile-square Utah
landfill can take only the
Class A waste, the least radioactive type on the government's commercial radioactive
waste scale.
"Certainly, I'm excited about it," said Steve Creamer, EnergySolutions' president
and chief executive officer. "It gives us the people and the facilities we
need to get the job done."
The addition of Duratek comes on the heels of last week's announcement that
18-year-old Envirocare was changing its name and buying BNG America, another
nuclear cleanup company. The changes signal the company's shift from being
a disposal site for low-level radioactive cleanup to a full-service nuclear
waste company.
Creamer said last week EnergySolutions would continue to grow and probably
go public. But he indicated there would be few changes at the Utah disposal
site, and certainly no hotter waste. Last year was the site's best so far,
with more than 25 million cubic feet of waste disposed at the facility, about
80 miles
west of Salt Lake City.
Owned by a private investor group that includes Lindsay Goldberg & Bessemer,
Peterson Partners and Creamer Investments, EnergySolutions was purchased
from its founding owner a year ago.
Duratek is slated to announce its 2005 earnings today. When it becomes part
of EnergySolutions, the Maryland company will become private, like its new
parent company.
Robert Price, Duratek's president and chief executive officer, said he and
Creamer had been talking for more than a year about the synergy that might
be created by melding their companies together.
"The two companies fit together extremely well," said Prince, whose position
in the new company has yet to be settled.
The merger means that everything from radioactive cleanups and power plant
maintenance to shipping, packaging, waste minimization, recycling, treatment
and disposal can be handled by EnergySolutions. In addition, both companies
have valuable
contracts with nuclear plants and for U.S. Energy
Department and Defense Department sites.
"Duratek and Envirocare are largely complementary," Price added. "We serve
the same customer."
Martin Schneider, editor-in-chief of the Washington, D.C.-based trade newsletter,
The International Radioactive Exchange, agreed. "It really
shores up their capabilities for cradle-to-grave waste services," he said.
Finalizing the deal will probably take months. Federal authorities will want
to look at whether merging the two companies leaves competitors at a significant
disadvantage, given that one company will control all the commercial low-level
disposal for 39 states.
Under a decades-old - and rickety - system established by Congress, there
are only three landfills for low-level radioactive waste nationwide. A site
in Hanford, Wash., is open only to 11 states, while waste from the remaining
states must go to the Utah site
or to Duratek's
South Carolina facility, which is slated for closure to all but three states
in two years.
In effect, virtually any company that has low-level waste to get rid of will
have to deal with EnergySolutions.
Creamer said he understands his company's position and added: "We don't take
advantage of anyone."
The Healthy Environment Alliance of Utah (HEAL), a frequent critic of Envirocare,
has questioned the company's aggressive growth, including the possibility
that it may bid for cleanup jobs in England. HEAL fought Envirocare's efforts
to get a state license for B and C waste, as well as its plans to double
the size of the Tooele County disposal site.
"These mergers [with BNG and Duratek] shed light on why Envirocare hasn't
given up its license to double in size" in Utah, said HEAL's Vanessa Pierce,
hinting that there may be more waste coming to the state. "They've virtually
monopolized the national market for nuclear waste, and they
want to go global."
Utah state regulators also will be taking a look, said Dianne Nielson, director
of the state Department of Environmental Quality. However, there may be little
role for state regulators to play, she noted.
"At this point, it does not appear that [the Duratek purchase] changes any
of their operations in Utah."
fahys@sltrib.com |
