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Ecolab buys into oil services
Ecolab is to acquire Champion Technologies, a supplier of speciality chemicals for oil and gas applications, and its related company Corsicana Technologies in a $2.2 billion deal that is expected to close by the end of the year. Payment will be split between $1.7 billion in cash and the issuing of 8 million common shares in Ecolab at closing.
Douglas Baker, chairman and CEO of Ecolab, which last year acquired water chemicals giant Nalco, described Champion as “a very attractive business that opportunistically became available … It offers very attractive growth and an annuity-like revenue model generating steady and predictable earnings patterns similar to our legacy Ecolab businesses,” he said.
Cost synergies of about $150 million are expected by 2015 through integration activities wholly within the Global Energy Services sector. The deal should be accretive to sales growth, EBITDA margins and earnings per share, Baker added. It should not impact the integration of Nalco, which is still continuing.
Based in Texas, Champion employs about 3,300 people in some 30 countries, though it is strongest in North America. In 2011, it had sales of $1.2 billion. Ecolab, which calls itself “the global leader in water, hygiene and energy technologies and services that provide and protect clean water, safe food, abundant energy and healthy environments” currently turns over about $11 billion/year and employs 40,000 people.