Environmental merger.
SpilTech Joins With Cierra to Form One-Stop Regional Environmental Services FirmTWO OF ARKANSAS' premier environmental firms have joined to form a new, all-purpose "green" firm that could become a juggernaut in the regional scene.
SpilTech Services Inc., a leading Arkansas emergency response and remediation company based in Little Rock, recently purchased Cierra Inc. of Bryant, one of the top environmental consulting companies in the state.
The resulting company will be known as Consolidated Environmental Services Inc. (CESI) and will have its headquarters in Little Rock.
Together, the two companies are the yin and yang of environmental services -- the heavy lifting and the brain work rolled into one package.
"There are no other companies in Arkansas that will do what the combined companies of SpilTech and Cierra can do," says Dewain Tennant, president of Cierra.
Terms of the sale were not disclosed, and the principal investors in CESI would not disclose the net income of the combined companies.
According to Tom Stanton, executive vice president of SpilTech, CESI expects combined annual revenues of $4 million-$5 million immediately and steady revenue growth of 15-20 percent over the next few years.
"Our immediate objective is to become a major force on a regional scale," Stanton says.
The two companies will operate as separate divisions of CESI, but management will drift between the two.
"We either want to take this public or sell to someone big like Chemical Waste Management |of Chicago~ or Waste Management Inc. |of Houston~," says Bud Finley, vice president of Cierra. "That's really our goal.
"We'll be on the lookout for small companies to fit into our movement."
The environmental field has been expanding rapidly in recent years. To date, there are no less than 50 environmental and ecological service companies listed in the yellow pages of the Little Rock-North Little Rock telephone book, but the Cierra-SpilTech merger should capture a dominant share of the state's market.
This merger might have happened three years ago, when the original owners of SpilTech decided to sell the company.
"We were at the table with them to buy SpilTech, but Dewain |Tennant~ and I decided to focus on the consulting end of the business," Finley says. "We stayed in touch and said, 'Maybe later,' and this is later."
Ownership Structure
The principal investors in CESI are Stanton; Don Kivowitz, who runs the Dallas branch; and Ed Penick Jr., SpilTech president.
Those investors collectively own a majority interest in Cierra, with minority ownership held by Finley and Tennant. CESI owns 100 percent of SpilTech.
The combined professional staff of CESI has expertise in a wide range of environmental fields, including toxicology, soil chemistry, site remediation, lead and asbestos management, hydrogeology, emergency response, tank management, employee training and environmental compliance.
Together, the firms have performed environmental services in 26 states.
The new company is well on its way to a strong regional presence in the Southwest, with branch offices in Dallas, Tulsa, Okla., and El Dorado. By the end of the year, CESI should have another regional office in Houston, according to Penick.
The company probably won't be perceived as a regional newcomer because SpilTech has been operating outside of Arkansas under the CESI name.
SpilTech began in 1985 as a company that mainly handled environmental spills. Over the past three years the new owners expanded the company's role into other environmental areas.
Cierra was founded in June 1990, drawing professionals from the consulting division of Environmental Systems Co. (Ensco) in Little Rock.
One of the keys to the new company's future is how fast the federal Environmental Protection Agency integrates cutting-edge remediation techniques into its Superfund cleanup projects.
"Cierra has always tried to stay at the cutting edge of technology," Tennant says.
He points out that EPA approval of a new environmental technique usually leads to rapid acceptance by the private sector.
One such technique currently being used by CESI is bio-remediation, the use of bacteria to eliminate hazardous waste.
CESI claims to be the only environmental company in the state that has performed bio-remediation for a client.
Down the road, this technique might be used to remove traces of animal waste from the water table in northwest Arkansas, to name one application.
The company is preparing to apply other new technologies such as soil vapor extraction, a process where volatile chemicals are stored in a contained section of earth, later to be drawn out of the soil.
Things to Come
At the moment, CESI is considering a technology called the "passive wall" to eliminate groundwater contamination for a current client.
The wall permits the free flow of fluid, setting up a path of least resistance that also filters out the contaminants.
Another gadget CESI is toying with is a special pair of underground probes that can easily locate a small sector of contaminated soil in a large area by sensing changes in the electric resistivity of the soil.
Company officials claim that one of the best benefits of working with CESI is its ability to provide specific environmental liability insurance of up to $1 million per incident for all work the company performs.
Few other environmental companies in the state offer this insurance, which is normally excluded from standard insurance policies.
SpilTech also will remain the only company in the state to be licensed as an environmental contractor, and the only Arkansas company accredited by the Washington, D.C.-based CHEMNET, an emergency telephone referral system for environmental cleanup companies.
Investors in the new company stress that the corporate acquisition was not made because either company was weak.
"One company is not propping the other up," Tennant says. "These two companies came together at a time when both had a sizable amount of active projects."
The Many Tasks of CESI
* 24-hour emergency response
* Underground storage tank management
* Aboveground tank cleaning
* Environmental site audits
* Asbestos and lead inspection and consulting
* De-watering and pond solidification
* Bioremediation
* Hazardous waste stream management/certified technical training
* Groundwater extraction and remediation
* Stormwater permitting
* Site remediation
* Waste management services
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| Title Annotation: | Spiltech Services Inc. acquires Cierra Inc. |
|---|---|
| Author: | Haman, John |
| Publication: | Arkansas Business |
| Date: | May 24, 1993 |
| Words: | 1001 |
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