Ecolab Inc. (NYSE:ECL), a company engaged in providing water, hygiene, energy technologies, and services agreed to purchase Champion Technologies, a specialty chemical company for $ 2.2 billion.
The purchase agreement includes Champion Technologies’ affiliate, Corsicana Technologies.
According to Ecolab Inc. (NYSE:ECL), the payment for the transaction will be 75 percent cash (approximately $1.7 billion) and 25 percent stock (8 million shares of Ecolab common stock).
Ecolab Technologies said, the acquisition of Champion Technologies will allow the company to improve the positions of its global energy services and capitalize on new oil and gas opportunities. It will also complement and strengthen its technological capabilities and customer base.
Champion Technologies Chairman Steve Lindley said its transaction with Ecolab Technologies is compelling, and it will enable them to benefit from significant energy market opportunities worldwide.
In a statement, Ecolab’s chairman and chief executive officer, Douglas M. Baker, Jr. said, “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 represent a very attractive business that opportunistically became available, enabling us to acquire an outstanding operator.”
According to him, Champion Technologies offers a very attractive growth, similar to its existing Nalco Global Energy Services business. He is confident that it will provide Ecolab Technologies with steady and predictable earnings. He said, “We expect it to be accretive to sales growth, accretive to EBITDA margins and accretive to adjusted EPS.”
Nalco Energy Services is the fastest growing business segment of Ecolab. The company generated 19 percent of its sales in energy services during the second quarter. Ecolab acquired Nalco last December for $5.4 billion to gain chemicals used for energy and water treatment.
Champion Technologies is located in Texas, with 3,300 employees in more than 30 countries. The company reported $1.2 billion sales in 2011. Its competitors included Schlumberger Limited. (NYSE:SLB), Halliburton Company (NYSE:HAL), and Baker Hughes Incorporated (NYSE:BHI).
Meanwhile, Ecolab Inc. (NYSE:ECL) expects to report earnings of 87 cents per share for the third quarter, which ended September 30. The company expects to report a strong, free cash flow that would exceed its net income.