District Court Prohibits Proposed Acquisition of Waste Control Specialists by EnergySolutions

On June 21, 2017, the United States District Court for the District of Delaware issued a Judgment and Order in a civil antitrust lawsuit seeking to block the proposed $367 million acquisition of Waste Control Specialists LLC by EnergySolutions.  The United States of America is the plaintiff in the case.  The listed defendants include EnergySolutions, Inc.; Rockwell Holdco, Inc.; Andrews County Holdings, Inc.; and, Waste Control Specialists LLC.

In its order, the district court entered judgment in favor of the plaintiffs and against the defendants, specifically enjoining and restraining the defendants “from carrying out the acquisition of Waste Control Specialists LLC by EnergySolutions, Inc. as memorialized in the merger agreement between Rockwell Holdco, Inc. and Andrews County Holding, Inc. dated November 18, 2015 and any amendments thereto.”

The case—which is listed as United States of America v. EnergySolutions, Inc.; Rockwell Holdco, Inc.; Andrews Country Holdings, Inc.; and, Waste Control Specialists—can be found under civil docket number 16-1056-SLR in the United States District Court for the District of Delaware.

Proposed Acquisition  On November 19, 2015, in separate press releases, it was announced that Rockwell Holdco had signed a definitive agreement to acquire Waste Control Specialists—a wholly owned subsidiary of Valhi, Inc. and operator of a low-level radioactive waste disposal facility located in Andrews County, Texas.  Rockwell Holdco is the parent company of EnergySolutions—which operates low-level radioactive waste disposal facilities in Tooele County, Utah and Barnwell, South Carolina.  Rockwell Holdco is owned by Energy Capital Partners, a private equity firm focused on investing in North America’s energy infrastructure.  According to the companies’ press releases, upon closing, Rockwell Holdco would pay $270 million in cash and $20 million face amount in Series A Preferred Stock.  In addition, Rockwell Holdco would assume approximately $77 million of Waste Control Specialists’ debt, as well as all financial assurance obligations related to the Waste Control Specialists’ business.

Antitrust Lawsuit  On November 16, 2016, the DOJ filed a civil antitrust lawsuit in the U.S. District Court for the District of Delaware seeking to block the proposed $367 million acquisition of Waste Control Specialists by EnergySolutions.  DOJ argued that the proposed transaction “would combine the two most significant competitors for the disposal of low level radioactive waste … available to commercial customers in 36 states, the District of Columbia and Puerto Rico.”  DOJ asserted that the proposed transaction “would deny commercial generators of … [low-level radioactive waste] —from universities and hospitals working on life-saving treatments to nuclear facilities producing 20 percent of the electricity in the United States—the benefits of vigorous competition that has led to significantly lower prices, better service and innovation in recent years.”

Low-Level Radioactive Waste  Low-level radioactive waste is the radioactive byproduct of nuclear power generation, scientific research and certain medical treatments.  Low-level radioactive waste includes such items as personal protective clothing, tools, water purification filters and resins, hardware from nuclear power plants, and equipment from medical and research institutions.  Low-level radioactive waste may only be disposed of in a facility licensed by, or pursuant to an exemption provided by, the U.S. Nuclear Regulatory Commission (NRC) or a state acting under an agreement with the NRC.  Low-level radioactive waste disposal is an essential service for operating nuclear reactors, research laboratories and medical facilities.  Additionally, low-level radioactive waste disposal is a requirement for the safe decommissioning of such facilities when they reach the end of their useful lives.

For additional information about EnergySolutions, please contact Dan Shrum at (801) 649-2000 or at dshrum@energysolutions.com or go to the company’s web site at www.energysolutions.com.  For additional information about Waste Control Specialists, please contact Rodney Baltzer at (972) 450-4235 or at rbaltzer@valhi.net or visit the company’s web site at www.valhi.net.