Ecolab to acquire Champion Technologies for $2.2B

Ecolab

Ecolab Inc. has agreed to acquire privately held Champion Technologies and its related company Corsicana Technologies for $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.

Douglas M. Baker, Jr., Ecolab's chairman and CEO 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. Champion's technology and product strengths in the US and Canada are very complementary to our innovative technology and services in the offshore and international energy markets."

Baker continued, saying, "The deal is terrific financially as well. 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. It is also highly synergistic, driving a run-rate of $150 million in cost synergies by the end of 2015. As a result, we expect it to be accretive to sales growth, accretive to EBITDA margins and accretive to adjusted EPS."

Steve Lindley, Champion Technologies' Chairman said, "This is a compelling strategic deal that provides us the possibility to fully capitalize on significant energy market opportunities around the world."

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.

The transaction is expected to close by year-end and be cash and earnings accretive in 2013, the first full year of the combined entity.

Ecolab expects to complete the remaining $280 million of its previously announced $1 billion share repurchase program in 2013.

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