Ecolab Buys Its Second Chemical Company In Less Than A Year
By Angelo Young | October 13, 2012 12:35 AM EST
Ecolab Inc. (NYSE: ECL), the St. Paul, Minn.-based maker of products for the industrial, healthcare, food service and hospitality industries, announced Friday it plans to acquire Champion Technologies Inc. for $2.2 billion.
The parties said the deal is expected to close by the end of the year.
The news comes nearly a year after Ecolab took over Nalco Holding Co. (NYSE: NLC) of Naperville, Fla., one of Champion’s primary competitors in the market for chemicals used to clean wells and boost output, in a $5.4 billion deal.
With the Champion acquisition, Ecolab is well positioned as a provider of chemicals for drilling, including in the bustling U.S. market for natural gas hydraulic fracking, or extracting gas from deep undergound. Competitors in this market include Houston-based Halliburton Co. (NYSE: HAL) and Baker Hughes Inc. (NYSE: BHI), also based in Houston.
Champion, of Houston, says it has about 3,300 employees and reported $1.2 billion in sales last year.
“Like our current Nalco Global Energy Services business, Champion offers very attractive growth and an annuity-like revenue model generating steady and predictable earnings patterns similar to our legacy Ecolab businesses,” said Douglas M. Baker, Jr., Ecolab's chairman and CEO, in the statement announcing the deal.
Champion, a privately-held Louisiana-based company, had been seeking a buyer and had hired Tudor Pickering Holt & Co. and Lazard Ltd. (NYSE: LAZ) as financial advisors, Bloomberg reported.
Ecolab shares rose 64 cents to $64.31 in early Friday trading.
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