Could Clean Earth’s sale transform Enviri into a high-margin industrial services player?

Why is Enviri Corporation exploring a sale of Clean Earth now?

Enviri Corporation (NYSE: NVRI) has formally advanced its ongoing strategic review by evaluating a potential sale or separation of its Clean Earth business. Management’s decision is part of a larger repositioning effort aimed at unlocking shareholder value, strengthening the balance sheet, and reorienting the company’s portfolio toward higher-efficiency segments. The company’s Chairman and Chief Executive Officer Nick Grasberger said that the move is intended to close the persistent gap between Enviri Corporation’s market valuation and its intrinsic asset value.

The Philadelphia-headquartered company, previously known as Harsco Corporation, is seeking to realign itself following continued underperformance in its rail and environmental services divisions. Clean Earth, which specializes in the regulated handling of hazardous and non-hazardous waste, has emerged as the clear outperformer in the group. With positive EBITDA margins and consistent revenue growth, the division is now seen as a premium asset capable of delivering significant returns through a tax-efficient spin-out or outright sale.

This shift is occurring amid a broader industry trend where companies in the industrial services space are divesting slower-growth, capital-intensive segments in favor of specialized, high-margin, and ESG-aligned businesses. Enviri Corporation’s planned divestment of Clean Earth exemplifies this dynamic and signals a pivot toward strategic asset monetization in response to both investor expectations and macroeconomic pressures.

What makes Clean Earth a prime divestment candidate for Enviri Corporation?

Clean Earth’s outperformance has placed it front and center in Enviri Corporation’s strategic roadmap. Originally acquired in 2019 for approximately $625 million, Clean Earth has since evolved into one of the largest specialty waste treatment networks in the United States. It operates over two dozen permitted facilities and handles a diverse range of complex waste streams, including PFAS-contaminated materials, contaminated soil, and construction debris. As of 2025, it is also increasingly viewed as a beneficiary of stricter U.S. regulatory frameworks around hazardous materials.

In Q2 FY25, Clean Earth generated $246 million in revenue, a 4 percent increase year-on-year, with adjusted EBITDA of approximately $40 million, reflecting stable 16 percent margins. This performance comes in stark contrast to Enviri Corporation’s Harsco Environmental and Harsco Rail divisions, both of which posted significant year-on-year revenue declines of 12 percent and 28 percent, respectively.

Management commentary during recent earnings calls has made it clear that Clean Earth represents the company’s strongest business in both operational and financial terms. The company has since hired BofA Securities and Jefferies LLC as financial advisors to explore deal options, underscoring the seriousness of its intentions. A final decision is expected by year-end, with the company emphasizing the goal of executing a tax-efficient structure that maximizes shareholder benefit.

How do the financials and institutional sentiment reflect the Clean Earth value thesis?

On a consolidated basis, Enviri Corporation reported revenue of approximately $2.34 billion for FY24, with adjusted EBITDA reaching a 10-year high of $319 million. However, the company also reported a GAAP loss from continuing operations of $119 million. These results continue to reflect a dichotomy in performance between its divisions. Clean Earth consistently contributes to EBITDA growth, while rail operations in particular remain a drag on consolidated results.

Enviri Corporation’s stock is trading at approximately $12.67 per share as of November 11, 2025. Although share price movement has remained muted, analysts suggest that Clean Earth could attract a valuation in the range of $300 million to $400 million or higher, depending on the deal structure and buyer profile. If a deal is executed near the higher end of these estimates, it could significantly improve Enviri Corporation’s capital structure by lowering net debt and freeing up capacity for potential share buybacks or reinvestments.

From a sentiment perspective, institutional flows remain cautious. Some value-focused analysts have issued speculative “hold” recommendations, arguing that the current share price undervalues Clean Earth’s true potential. The execution risk of separating such a regulated, asset-heavy business remains a key overhang for investors, although the upside potential is drawing increasing attention.

What are the execution risks and regulatory complexities involved?

Despite Clean Earth’s strong fundamentals, the proposed divestment is not without challenges. Enviri Corporation has emphasized that there is no guarantee of a transaction, nor has a definitive timetable been established. The process is subject to external factors such as regulatory approval timelines, tax implications, environmental compliance obligations, and counterparty negotiations.

Clean Earth’s business operates in a tightly regulated environment. The transfer of permits, transition of hazardous materials responsibilities, and continuity of operations across 200-plus permits and licenses pose considerable operational complexity. In addition, the choice of buyer—whether strategic or financial—will influence the perceived value realization. Strategic buyers in the waste and environmental services space may view Clean Earth as an ideal bolt-on acquisition, whereas private equity firms may target it as a standalone platform opportunity.

There is also the matter of residual pressure from the company’s rail segment, which has continued to underperform with negative EBITDA contribution and flat order books. Analysts following the company believe the rail unit may eventually need its own strategic review to prevent it from diluting the benefits of any Clean Earth transaction.

How does this align with sector-wide trends and investor expectations?

The planned Clean Earth transaction is emblematic of a broader trend in the environmental services and industrials sector. Increasing investor appetite for ESG-aligned assets has made businesses like Clean Earth—those that handle complex, regulated waste—particularly attractive. Heightened public awareness of PFAS contamination, electrification waste streams, and urban construction pollution has only added to the premium that buyers are willing to assign to companies in this niche.

Over the past three years, several publicly traded industrials have moved to separate or divest non-core segments. This includes similar portfolio realignments in steel recycling, railcar leasing, and construction materials. Enviri Corporation’s actions place it in that same league of industrial companies responding to shareholder pressure for simplification and focus.

Importantly, the Clean Earth business sits at the intersection of infrastructure, regulation, and sustainability—making it well-positioned for continued growth. The deal also allows Enviri Corporation to reposition itself as a sharper, more capital-efficient company, potentially attracting ESG-oriented institutional capital that previously ignored the broader industrial conglomerate structure.

What will the market be watching in the coming months?

Key signals that market participants will closely monitor include the formal announcement of a transaction, buyer identity, valuation multiple, and stated use of proceeds. Analysts will also scrutinize any changes to the company’s forward guidance, especially regarding how management plans to manage the remaining business units once Clean Earth exits.

If Enviri Corporation successfully executes the sale or spin-off of Clean Earth at a premium valuation, it could materially shift investor perception. The company’s stock, currently trading near multi-year lows, could re-rate significantly if proceeds are used to improve leverage, repurchase shares, or strengthen operating performance elsewhere.

However, failure to execute the transaction or any regulatory holdup could trigger short-term volatility. Analysts caution that the company must also provide a credible long-term plan for Harsco Rail and Harsco Environmental if it wants the full benefit of the value unlock.

What are the key takeaways from Enviri Corporation’s Clean Earth divestment strategy

• Enviri Corporation (NYSE: NVRI) is exploring a tax-efficient sale or spin-off of Clean Earth to unlock shareholder value and streamline operations.

• Clean Earth generated $246 million in revenue and $40 million in adjusted EBITDA in Q2 FY25, making it the company’s best-performing division.

• The sale aligns with broader sector trends favoring ESG-focused, high-margin industrial service providers.

• Financial advisors BofA Securities and Jefferies LLC have been appointed to structure the transaction.

• The stock is trading at $12.67 with cautious institutional sentiment pending deal execution.

• Risks include regulatory complexity, permit transfer, tax considerations, and underperformance in other segments.

• A successful transaction could improve Enviri Corporation’s leverage and drive a re-rating of its stock.