The environmental services company Clean Harbors Inc. said it has agreed to buy Safety-Kleen Inc., an oil recycler whose clients include NASCAR, for $1.25 billion, in a deal that will increase the Norwell company’s sales and profits by about 50 percent.
Clean Harbors has specialized in the field of collecting and disposing of hazardous waste since the 1980s, expanding significantly over that time. In what its chief executive, Alan S. McKim, called a “landmark event” for the company, the addition of Safety-Kleen launches Clean Harbors into the profitable oil re-refining business.
McKim said that will enable it to do more work with smaller businesses, providing parts cleaning and waste collection services.
“It’s a good strong relationship that we’ve had [with Safety-Kleen] and we just want to build on that now,’’ he said.
Safety-Kleen’s profits have lagged through a series of ownership changes and a bankruptcy reorganization in 2000, according to McKim.
“We hope to get those margins going back in the right direction,’’ he said.
Safety-Kleen, based in Plano, Texas, is owned by a group of investors led by Highland Capital Management of Dallas. It is a business and a brand that Clean Harbors knows well, having acquired Safety-Kleen’s chemical services business a decade ago.
Michael E. Hoffman, a managing director at the Baltimore brokerage Wunderlich Securities Inc., said he is glad to see the rest of Safety-Kleen come under the Clean Harbors umbrella.
“I think that this has been well bought and that Clean Harbors has proven itself to be a very effective acquirer of businesses,’’ Hoffman said. Stock markets were closed Monday because of Hurricane Sandy and were scheduled to be closed Tuesday as well, so it was unclear how investors will react to news of the deal.
Clean Harbors has enjoyed some of the best returns of any Massachusetts company over the past decade. It had revenues of nearly $2 billion last year and net income of $127 million. Revenue for 2012 is projected to be $2.2 billion.
Safety-Kleen last year reported $1.3 billion in revenue and net income of $136 million.
The two companies have been in the same orbit for some time. For instance, Clean Harbors has been in the oil recycling business in the Northeast, but Safety-Kleen is the top player in that business, with oil re-refining plants in East Chicago, Indiana, and Breslau, Ontario. The company said it collects 200 million gallons of used oil annually, the majority of which it returns to the marketplace as reusable motor oil.
Many former Safety-Kleen employees work at Clean Harbors, McKim said, and Safety-Kleen also is a customer.
Bob Craycraft, Safety-Kleen’s chief executive, said in a statement, “We believe this transaction represents an opportunity to combine two truly dynamic organizations.” Clean Harbors has 8,500 employees; Safety-Kleen has 4,200.
The deal is expected to close by year’s end, and is contingent on approval from US and Canadian regulators.