TIMELINE
1980
MARCH
In a trailer parked in a suburb of Boston, virtually within nose-shot of the country's dirtiest harbor, 24-year-old Alan S. McKim founds Clean Harbors Inc. (henceforth CLHB, its NASDAQ symbol) to transport, treat, and dispose of hazardous materials. Capitalization: $13,000. Employees: 4. CLHB books its first Fortune 500 customer: Texaco. CHLB hires local firm, Gerald T. Reilly & Co., as certified public accountants.
Dow Jones Industrial Average: 785
1982
FEBRUARY 28
Fiscal year ends, revenues $1.5 million. Employees: 18.
1984
FEBRUARY 29
Fiscal year ends, revenues $4.2 million. Employees: 34.
APRIL 1
CHLB acquires two small divisions of a large corporation for $3,240,335.
1986
FEBRUARY 28
Fiscal year ends, revenues $32.2 million. CLHB in good shape; long-term debt about $5 million. Employees: 287.
DJIA: 1,709
OCTOBER
McKim receives first query from venture capital firm: does he want to raise some capital by selling part of the company?
DECEMBER
McKim receives first query from investment banker: does he want to raise capital by going public? McKim figures he's pushed bank borrowing far enough, mulls over both queries.
DJIA: 1,896
1987
JANUARY
CLHB amicably fires CPA Gerald T. Reilly & Co. Reason: accounting firm too small. Besides, in IPO, big-name CPA connotes credibility. Arthur Andersen & Co. hired.
FEBRUARY 28
Fiscal year ends, revenues $46.7 million. Employees: 380. CLHB undergoes corporate reorganization; new entity is legal parent of all eight subsidiaries acquired over the years.
DJIA: 2,224
MARCH 2
One-hundred-percent owner McKim wants employees to "feel some ownership," so splits his stock 269-for-1. Automatic multiplicity of shares enables CLHB to initiate stock-option plan. Key employees offered options to buy stock at equivalent of $2.70 per today's share. Pretty good deal: fair market value independently appraised at $5 a share.
MARCH
With the intention of going public in early fall, McKim completes interviewing of underwriters. His criterion is not so much the particulars of the deal, but how much promotional support underwriter can provide after it's done.
After interviewing five serious contenders, McKim selects Kidder, Peabody & Co. Main reason: it follows and understands environmental-services industry.
MAY
Traditional all-hands meeting to sketch out responsibilities and sequence of events takes place in offices of CLHB's attorneys. More than a dozen functionaries from both sides in attendance.
JULY 31
Appears offering could go off about $15, or about 44 times '87 earnings.
DJIA: 2,572
AUGUST
CLHB hires small West Coast investment banker, Robertson, Colman & Stephens, to comanage deal. McKim's reservation: because Kidder had other customers in the same industry, possibly Kidder wouldn't pay proper attention to CLHB; a small firm is more attuned to a small business.
AUGUST 19
Stock is split again, this time 18.52-for-1. The odd divisor handily turns the number of outstanding shares into an even 5 million. In addition, nearly 18% of CLHB is sold for $5 million to venture capital investors, chosen from among other interested venturers "primarily because of their knowledge of the industry." The arrangement adds 638,994 shares to outstanding stock. Based on the sale, CLHB worth about $26 million.
AUGUST 25
As bull market roars, $15 a share cinched. But not quite: as it turns out, this is the Dow's all-time high.
DJIA: 2,722.42
SEPTEMBER 25
Arthur Andersen finishes reconstructing the financial effect of the April 1985 acquisitions. (The divisions did not have separate audits when acquired, and the SEC requires pro formas showing effect of recent acquisitions as if acquired three years before date of offer.) Cost: $150,000; 60 days' time.
SEPTEMBER 29
Directors vote to authorize 20 million shares of common stock, of which, after the IPO, 6,638,994 would be outstanding. The rest could be sold in future offerings, used for acquisitions, provided to employees, or merely allowed to sit there.
Because of possible conflict of interest, Kidder, Peabody withdraws. Robertson, et al, becomes sole lead underwriter.
SEPTEMBER 30
Offering registration filed with SEC. IPO is planned within 45 days for 1.5 million shares at $13 to $15. Official waiting period begins, pending SEC sanction. During the period, CLHB and its underwriter discreetly market the shares via red herring (printing costs: $150,000). All systems go.
DJIA: 2,596
OCTOBER 19
DJIA: 1,739
OCTOBER 20
Various conferences with underwriter, begin to discuss possible 1) postponement, 2) repricing, 3) resizing, 4) withdrawal of IPO. Final decision: reduce price by 40%, from $15 to $9 per share; reduce size by 33%, from 1.5 million to 1 million shares; reduce net to CLHB by 60%, from around $21 million to around $8 million.
NOVEMBER 11
Road shows begin. Underwriter arranges for McKim and fellow executives to fly in and out of money centers across the country, talking up CLHB to gatherings of prospective purchasers. Some days they visit three cities. First city: Boston.
NOVEMBER 19
Road shows end. Last city: San Francisco.
NOVEMBER 24
CLHB sells 1.063 million shares of common stock (the underwriter went slightly over the allotment, as is its "green shoe" prerogative) to public at $9, nets $8,147,305. With 6.7 million shares outstanding, CLHB is worth more than $60 million. Not a seller himself, CLHB founder now holds 71%, or more than $42 million worth.
NOVEMBER 30
Stock falls to $8.50 bid. Was it pricey, after all? CLHB founder now holds $40 million worth.
DJIA: 1,834
1988
FEBRUARY 29
Fiscal year ends, revenues $73.5 million. Employees: 680. Financials show that more than $12 million of debt has been repaid through proceeds of the two 1987 stock sales.
DJIA: 2,072
