Back to top

Analyst Blog

Zacks Equity Research

Ecolab Completes Champions Buyout

ECL MTX

 ZacksTrade Now

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Ecolab Inc. (ECL - Analyst Report) has finally managed to successfully complete the pending acquisition of Champion Technologies and its related company Corsicana Technologies for $2.3 billion.

Initially, the transaction was expected to close by the end of 2012 but due to certain antitrust-related issues with the U.S. Department of Justice (“DOJ”), the company had extended its agreement till Feb 28, which got further delayed to end-March. Finally, the closing date was set on Apr 15 and the company was able to meet the deadline following a consent agreement with the DOJ.

Houston, Texas-based Champion Technologies is a leading specialty chemical company. Its integrated offerings are an assimilation of sustainable chemistry, technology and service for the worldwide oil and gas industry. With employee strength of about 3,200, the company operates in more than 30 nations. Total sales for Champion Technologies in 2012 came in at $1.3 billion.

Our Take

With a background of robust growth, Ecolab is poised to gain momentum via its aggressive strategy of pursuing acquisitions. Ecolab acquired Champions to become a giant in the oilfield chemical business and reduce competition for its Nalco subsidiary. The acquisition will beef up Ecolab’s Global Energy Services franchise and expand its footprint in the North American energy market.

The Champions deal is the company’s largest acquisition since the Nalco buyout. Moreover, the correlated technology and consumer base of Nalco and Champions ensures that the deal is a strategic fit for the company as the combined venture will be well positioned in the global energy market.

Although the deal will no longer be accretive to 2013 earnings by 12 cents as predicted earlier, Ecolab now expects adjusted earnings per share to increase by 7 cents in 2013. The accretion will likely increase earnings per share by 50 cents by 2016.

The news boosted investor confidence on this global cleaning and sanitation products maker, as reflected by the stock reaching a new 52-week high of $83.24 on Thursday, Apr 11.

Ecolab currently has a Zacks Rank #3 (Hold). Other chemical-specialty companies such as Balchem Corp. , Minerals Technologies (MTX - Snapshot Report) and Prospect Global Resources warrant a look. While Balchem is a Zacks Rank #1 (Strong Buy) stock, the other two carry a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
GENERAL FINA GFN 8.20 +5.67%
QIHOO 360 TE QIHU 91.57 +4.38%
VIPSHOP HOLD VIPS 140.01 +3.49%
INVEST TECH- ITG 19.16 +3.34%
VERTEX ENERG VTNR 7.38 +3.07%