CCS renamed Tervita, retires some brands
Move could make public listing easier
In a move that could make listing on a public stock market easier, CCS Corp., one of Calgary’s largest private companies, said Wednesday it will change its name to Tervita Corp. and retire more than a dozen brands.
But the founder and chairman of the company, one of the largest privately owned North American environmental and energy services companies, said a decision on going public has not been made just yet.
“Time will tell. We’re not publicly announcing anything like that,” said Dave Werklund, a Calgary philanthropist who owns about 30 per cent of CCS, before an employee presentation at the Big Four Building on the Stampede grounds.
In 2007, Werklund led an investor’s group including CAI Capital Partners, Goldman Sachs, Kelso & Company, Vestar Capital Partners, British Columbia Investment Management Corp. and O.S.S. Capital Management LP in a $3.5-billion buyout of what was then CCS Income Trust.
The company takes its name from Canadian Crude Separators Inc., an oil waste treating company founded by Werklund in 1984, five years after he and Gordon Vivian had bought a single drilling rig to start Concord Well Servicing, another current CCS brand.
CCS became a publicly traded company in 1993 and converted to an income trust in 2002.
The 2007 privatization left the company saddled with debt that has grown as it made acquisitions, noted president and chief executive John Gibson in an interview Wednesday.
A veteran of publicly traded companies like U.S. giant Halliburton, Gibson replaced Werklund at CCS in 2010 and told the Herald at the time that he wanted to eventually take CCS public again.
On Wednesday, he said a decision on going public can’t happen until after mid-2012 because changes associated with the new name won’t be completed until then.
“By consolidating all of the financials for the different entities . . . the name change and everything that’s going on underneath, support being public again if our current shareholders choose to do that,” Gibson said.
“It looks really attractive. We’ve had incredible growth, very strong financial performance over the last 18 months, we have a very aggressive plans going into 2012, 2013.”
He said CCS had a down year in 2009 but is breaking profit and revenue records recently with annual sales of about $5 billion per year.
Its debt, meanwhile, is at more than $2 billion, big enough to be a concern for its private equity fund shareholders.
In 2011, adjusted earnings before interest, taxes, depreciation and amortization or EBITDA grew 30 per cent at CCS, it said, noting that 90 per cent of EBITDA was generated in Canada and the rest in the U.S.
Analysts said booming oilfield activity is filling the coffers at publicly traded CCS rivals such as Calgary-based Newalta Corp., where the stock price is up 16 per cent this year and revenue rose 19 per cent in 2011.
Analyst Jason Granger of BMO Capital Markets said the market would probably welcome a new environmental services company, pointing out that most of Newalta’s increase in earnings in 2011 was attributed to oilfield activity.
Another analyst who covered the privatization in 2007 said he thinks an IPO would win strong support but the market likely wouldn’t match the valuation metrics of five years ago.
As CCS has grown through buying companies over the past quarter century, it has retained the acquired brands, creating a situation where a client on a big project might be employing several CCS divisions without being aware they are related, Gibson said.
CCS brands include Beck, Concord, Hazco, HMI, Lionhead, Midstream, Normcam, Prodrill and Peninsula Waste Water Services.
Over the next months, those names will be retired and replaced with Tervita, which comes from the Latin words “terra,” meaning earth, and “vita,” meaning life.
“This has been a vision I’ve had for many years, to become one company, one brand, one set of cultures, one set of people rules,” Werklund said.
Gibson said the name change will save money — the company will be able to bulk order one colour of coveralls instead of three different colours, for instance — but employees need not fear layoffs.
In 2011, he said, CCS hired about 2,000 new staff and it will likely do the same this year as it grows from 4,200 to about 6,000 employees in Canada and the United States.
It has about 1,200 staff in Calgary, where it is consolidating offices at the Palliser South building on 10th Avenue S.W.
The company has benefited from the growth of hydraulic fracturing in tight oil and gas plays in Canada and the U.S., he said.
It has purchased a couple of companies in the North Dakota Bakken, where a typical well fracking job might involve storing and recycling 12 to 15 million litres of water, with CCS supplying the storage tanks and disposing of the waste, he added.