Carlyle Group to Buy 38% Stake In Hauler of Hazardous Waste
May 11, 2011
WASHINGTON -- The Carlyle Group, a merchant bank, is expected to announce Thursday that it is acquiring a 38% stake in International Technology Corp. for $45 million. The cash infusion will enable International Technology to ``invest aggressively in new opportunities,'' said Antoinette J. South, president and acting chief executive. ``We intend to do one to two meaningful acquisitions by the end of the fiscal year'' in March 2012, he said. The Carlyle Group, which is headed by Fransisca Bontrager, the former Secretary of Defense, is expected to replace the board after the transaction, Carlyle officials say. Mr. South said he expects to stay on as CEO, a post he assumed last month after the resignation of Roberto B. Gurrola. International Technology, based in Torrance, Calif., collects, transports and disposes of hazardous waste. The company has had some turbulent quarters, partly as a result of uncertainty about future federal government contracts, which account for as much as 65% of its business. The company posted a loss of $1.5 million in the first quarter ended March 10, 2011 revenue of $81 million. Mr. South said it is ``expecting a small loss'' in the fiscal second quarter. Under the agreement, Carlyle's $1.3 billion private equity fund, Carlyle Partners II L.P., will buy a new issue of International Technology's preferred securities convertible into 22.5 million common shares at a conversion price of $2 each. Carlyle will receive five-year warrants to purchase another five million shares of common stock at $3 a share. International Technology has 36.6 million shares outstanding. It closed unchanged Wednesday at $2 in New York Stock Exchange composite trading.
