June 13, 2006

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EnergySolutions Expands
Duratek shareholders OK $422.5M merger
By Bob Mims
Salt Lake Tribune, UT
June 6, 2006

Duratek shareholders on Tuesday rebuffed hedge-fund opposition and voted solidly for EnergySolutions' acquisition of the Maryland radioactive-waste-disposal company in a deal worth $422.5 million.
   

Duratek spokeswoman Diane Brown said the merger bid won 59.71 percent of the shares voted during an afternoon stockholders meeting in Columbia, Md. Upon signing of closing documents later this week, Duratek, formed in 1990, will become a wholly owned subsidiary of EnergySolutions.
   

"We at Duratek want to thank all our stockholders for their support all of these years," Brown said. "We look forward now to becoming a part of EnergySolutions, a major international nuclear-services company."
   

With the acquisition, Salt Lake City's EnergySolutions more than doubles its work force to 2,500 and adds three states - Maryland, Colorado and New Mexico - where it does business, for a total of 40. It also adds a company that brings in more than $280 million in annual revenue.
   

EnergySolutions spokesman Mark Walker said the company would wait until the acquisition is formalized to discuss its immediate plans for Duratek.
   

"We can say now that's we're very pleased with the outcome of the vote," he said. "We look forward to closing the deal sometime this week and moving on to an exciting future for EnergySolutions."

Under terms of the acquisition, EnergySolutions - a privately held entity formed in February by the former Envirocare of Utah, Scientech D&D and BNG America - will pay $22 for each of some 14.9 million Duratek shares, along with other considerations, for $345 million. EnergySolutions also will refinance Duratek's $77.5 million bank debts, according to Securities and Exchange Commission documents.
   

The deal won approval despite strong opposition from Tontine Capital Partners. The Greenwich, Conn., hedge fund had been buying up Duratek stock prior to the vote, increasing its stake to at least 2.2 million shares, or 13 percent of the company. Tontine executives did not return calls seeking comment late Tuesday.
   

However, the successful Duratek campaign was not the only big news to affect EnergySolutions on Tuesday. Company officials were weighing the effect of regulatory delays being experienced by competitor Waste Control Specialists in its plans for a low-level radioactive-waste disposal facility in Texas.
   

The Texas facility is planned for classes B and C low-level materials, the same classes of waste accepted at Duratek's Barnwell, S.C., site, which becomes an EnergySolutions holding. That facility could eventually be called upon, along with other such commercial waste sites, to accept additional radioactive shipments if the Texas plan founders.
   

EnergySolutions officials were quick to assure Utahns that none of that waste will be accepted at the company's Clive site about 60 miles west of Salt Lake City, which is restricted to only "Class A" - the least hazardous level of waste - from 36 states.
   

Dane Finerfrock, director of Utah's Radiation Control Division, confirms that EnergySolutions' license for low-level radioactive waste does not address volume or origins of waste, only that it is Class A - materials such as contaminated gloves, clothing, glass and plastic laboratory materials, and other disposable items.
   

"As for the purchase of Duratek today, though, I don't see how that will affect [radioactive waste] operations here in Utah in any way," he said. "I sure don't see how that could increase overall volume in Utah or even other sites right now."
   

Nuclear industry watchdog Jason Groenewold, director of Health Environmental Alliance of Utah, saw the development in a darker light.
   

"The way this is evolving, EnergySolutions is positioning itself to become the 'one-stop' dump and handler for all things nuclear," he said. "The company now controls two of the three commercial radioactive waste dumps in the country" and the majority of those sites' wastes end up in Utah.
   

EnergySolutions' Walker countered that although there indeed are no limits on the amount of Class A waste the Clive facility can accept, the industry's production of such materials is leveling off.
   

bmims@sltrib.com
 
   

About the deal
   
   

EnergySolutions, formed in February by the merger of Envirocare of Utah, Scientech D&D and BNG America, strengthens its position as the nation's leading radioactive-waste-services company by acquiring Duratek.
   
   

The deal is valued at $422.5 million, including a $22-per-share payout for Duratek stock, and acquisition of the Maryland company's outstanding debt.
   
   

Newly expanded EnergySolutions owns two of the three commercial low-level nuclear-waste facilities in the nation and employs 2,500 workers in 40 states.

http://www.sltrib.com/portlet/article/html/fragments/print_article.jsp?article=3907170