Ecolab – ECL – To Acquire Champion Technologies

NYSE: ECL) announced that it has agreed to acquire privately held Champion Technologies and its related company Corsicana Technologies (hereafter collectively referred to as Champion) in a transaction valued at approximately $2.2 billion, to be paid through a mix of approximately 75% cash and 25% stock. Champion is a Houston, Texas-based global energy specialty products and services company with approximately 3,300 employees in more than 30 countries delivering product and service-based offerings to the oil and gas industry. 2011 sales were $1.2 billion. Closing is expected to occur by year-end 2012, subject to regulatory clearance and other customary closing conditions.

ECL – Acquisition Highlights:

• Better positions Ecolab’s Global Energy Services to fully capitalize on major energy opportunities
  • Highly complementary geography, technology and customer base
  • Strengthens North American business, better positioning us to fully capitalize on the new oil and gas opportunities
  • Enhances our technology, further strengthening our capabilities
• Significant accretion/leverage opportunities
  • Accretive to sales growth, adjusted EBITDA margins and adjusted EPS
  • 2013 adjusted EPS accretion of approximately $0.12 per share increasing to approximately $0.50 per share by 2016
  • Expect $150 million run-rate cost synergies by end of 2015; $50 million in 2013
  • Drives improved ongoing leverage in global supply chain
• Makes Ecolab stronger
  • Strengthens position in fastest growth segment
  • Has de minimis impact on company cyclicality as business focus is principally on production phase of energy business
  • Acquisition improves our earnings potential going forward
  • Deal structure maintains strong investment grade balance sheet; plan to return to ‘A range’ metrics within 3 years

Douglas M. Baker, Jr., Ecolab’s Chairman and Chief Executive Officer commented on the announcement, saying, “This transaction represents a rare opportunity to build on our position in a fast growing market by improving our geographic coverage and technology offerings. As a premier company and proven innovator committed to delivering outstanding technology and service, Champion represents a very attractive business that opportunistically became available, enabling us to acquire an outstanding operator. Champion’s technology and product strengths in the U.S. and Canada are very complementary to our innovative technology and services in the offshore and international energy markets. We are excited by the additional solutions we will be able to bring to our customers and the strong growth potential this opportunity offers for our combined operations as we continue to target the “new energy” opportunities which require significantly more of the products and services that both we and Champion provide.”

Ecolab will pay approximately $1.7 billion in cash and issue approximately 8 million shares of Ecolab common stock, subject to certain adjustments at and after closing.

About Ecolab – ECL

With 2011 pro forma sales of $11 billion and more than 40,000 employees, Ecolab Inc. (ECL) is the global leader in water, hygiene and energy technologies and services that provide and protect clean water, safe food, abundant energy and healthy environments. ECL delivers comprehensive programs and services to the food, energy, healthcare, industrial and hospitality markets in more than 160 countries.

About Champion Technologies

Champion Technologies is a global specialty chemical company with 3,300 employees in more than 30 countries delivering innovative and engineered programs for upstream, midstream, and downstream oil and gas markets. CorsiTech is a global specialty chemical organization dedicated to meeting and exceeding customers’ technical needs in the drilling, stimulation and completion markets.

More Posts by this author

• J.B. Hunt Transport Shares Rally on Q3 Results (JBHT)
• Gold Prices Settle Lower
• Stocks End on a Mixed Note
• Gold Prices Lower; Silver Prices also in Red
• Stocks in Red in Late Trading
• Wells Fargo & Company – WFC – Record net income of $4.9 billion, up 27 percent
• ExactTarget – ET – Acquires iGoDigital

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.