Ecolab Buys Esoform

In less than a week of closing its $8.3 billion acquisition of Illinois-based water treatment services major Nalco Holding, Ecolab (ECL - Analyst Report) has bought another entity to expand its global healthcare business. The Minnesota-based U.S. Cleaning and sanitation products giant said that it has snapped up Italian health care products maker Esoform for an undisclosed price.

Domiciled outside of Venice, Esoform is the biggest independent Italian healthcare manufacturer focused on making infection prevention and personal care products. The entity has annual sales of roughly $12 million. Ecolab has not disclosed the financial and other terms of the deal.

Ecolab stated that the acquisition will provide it a state-of-the-art GMP (Good manufacturing practice)-certified manufacturing facility, which will allow significant product supply efficiencies. It will also provide access to novel technology which the company can leverage across its European businesses.  

Ecolab caters products and services to the hospitality, foodservice, institutional and industrial markets across more than 160 countries. To spur growth, the company continues to invest in strategic areas such as, product innovation, healthcare, water and energy and global pest elimination.

Moreover, Ecolab remains focused on bringing new technologies aimed at reducing food safety risks. Moreover, the company remains active on the acquisition front and is exploring opportunities to expand into emerging markets for growth.

Although we are impressed by Ecolab’s strong international exposure, we remain cautious about aggressive competitive pressure from the likes of Clorox (CLX - Analyst Report) and Church & Dwight (CHD - Snapshot Report). Raw material price inflation also remains a headwind. We currently have a Neutral recommendation on Ecolab, which is supported by a Zacks #3 Rank (Hold).

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