Ecolab expects to close on Champion purchase in the next several days
Acquisition will strengthen Ecolab's position in fast-growing energy
services market
ST. PAUL, Minn.--(BUSINESS WIRE)--
Ecolab Inc. announced today that it has entered into a consent agreement
with the U.S. Department of Justice (DOJ), which has been filed in the
US District Court for the District of Columbia. As a result, Ecolab
expects to complete the Champion acquisition within the next several
days.
The consent agreement with the DOJ requires Ecolab to take certain steps
designed to ensure continued independent competition utilizing Champion
technology for deepwater Gulf of Mexico energy services. The steps
include divesting, to a suitable third party, Champion patented
technology related to a single product used in the Deepwater Gulf of
Mexico, licensing certain other Champion deepwater chemistry to the
third party for use in the Deepwater Gulf of Mexico, providing an option
to the third party to purchase a Champion chemical blending facility,
manufacturing relevant products for the third party for a limited period
and enabling the third party to recruit certain Champion employees
needed to support the business. Importantly, the consent agreement
impacts only about 3% of Champion's business. Also, going forward Ecolab
will continue to be able to serve customers in the Deepwater Gulf of
Mexico region utilizing the Nalco team and technology.
Douglas M. Baker, Jr., Ecolab's Chairman and Chief Executive Officer
commented on the announcement, saying, "We are pleased to have reached
an agreement with the DOJ on this matter. We also remain very excited
about the potential of this transaction. The reasons we were attracted
to Champion in the first place remain solidly in place. Champion
strengthens our position in the fast-growing oil and gas services
industry. It bolsters our ability to better serve customers by bringing
important and complementary geographic and technology strengths to our
Global Energy business — particularly in the upstream production area —
and enables us to more fully capitalize on the significant developing
oil and gas market opportunities. In addition, we expect that it will
provide attractive earnings accretion, adding approximately $0.07 to
2013 earnings per share and rising to $0.50 by 2016.
"This transaction is an important strategic investment in a key growth
area. We look forward to welcoming Champion's outstanding people to our
company. We remain committed to also improving our core strengths in
food safety, healthcare, water and energy as we further build our
business to deliver continued strong shareholder returns."
Champion Technologies is a Houston, Texas-based global energy specialty
products and services company with approximately 3,200 employees in more
than 30 countries delivering product and service-based offerings to the
oil and gas industry. 2012 sales of the acquired business were
approximately $1.3 billion. The total transaction value, including
assumed debt, is approximately $2.3 billion.
A trusted partner at more than one million customer locations, Ecolab
(ECL) is the global leader in water, hygiene and energy technologies and
services that protect people and vital resources. With 2012 sales of $12
billion and 41,000 associates, Ecolab delivers comprehensive solutions
and on-site service to ensure safe food, maintain clean environments,
optimize water and energy use and improve operational efficiencies for
customers in the food, healthcare, energy, hospitality and industrial
markets in more than 170 countries around the world. For more Ecolab
news and information, visit www.ecolab.com.
Cautionary Statements Regarding Forward-Looking Information
This communication contains certain statements relating to future events
and our intentions, beliefs, expectations and predictions for the future
which are forward-looking statements as that term is defined in the
Private Securities Litigation Reform Act of 1995. Words or phrases such
as "will likely result," "are expected to," "will continue," "is
anticipated," "we believe," "we expect," "estimate," "project," "may,"
"will," "intend," "plan," "believe," "target," "forecast" (including the
negative or variations thereof) or similar terminology used in
connection with any discussion of future plans, actions or events
generally identify forward-looking statements. These forward-looking
statements include, but are not limited to, the expected closing of the
Champion acquisition and statements regarding earnings accretion from
the Champion acquisition. These statements are based on the current
expectations of management of the company. There are a number of risks
and uncertainties that could cause actual results to differ materially
from the forward-looking statements included in this communication.
These risks and uncertainties include (i) the risk that the regulatory
approvals or clearances required for the Champion acquisition may not be
obtained, or that required regulatory approvals may delay the Champion
acquisition or result in the imposition of conditions that could have a
material adverse effect on the company or cause the company to abandon
the Champion acquisition, (ii) the risk that the conditions to the
closing of the Champion acquisition may not be satisfied, (iii) the risk
that a material adverse change, event or occurrence may affect the
company or acquired companies prior to the closing of the Champion
acquisition and may delay the Champion acquisition or cause the company
to abandon the Champion acquisition; (iv) problems that may arise in
successfully integrating the businesses of the company and Champion,
which may result in the combined business not operating as effectively
and efficiently as expected, (v) the possibility that the acquisition
may involve unexpected costs, unexpected liabilities or unexpected
delays, (vi) the risk that the businesses of the company or Champion may
suffer as a result of uncertainty surrounding the acquisition and (vii)
the risk that disruptions from the transaction will harm relationships
with customers, employees and suppliers. In particular, the ultimate
results of any Champion integration and business improvement actions,
including cost synergies, depend on a number of factors, including the
development of final plans, the impact of local regulatory requirements
regarding employee terminations, the time necessary to develop and
implement the integration and other business improvement initiatives and
the level of success achieved through such actions in improving
competitiveness, efficiency and effectiveness.
Additional risks and uncertainties that may affect operating results and
business performance are set forth under Item 1A of our most recent Form
10-K for the year ended December 31, 2012 and the company's other public
filings with the Securities and Exchange Commission (the "SEC") and
include the vitality of the markets we serve; the impact of economic
factors such as the worldwide economy, capital flows, interest rates and
foreign currency risk; our ability to integrate the Nalco merger and the
Champion acquisition and to realize the anticipated benefits of these
transactions; our ability to attract and retain high caliber management
talent to lead our business; our ability to execute key business
initiatives; potential information technology infrastructure failures;
exposure to global economic, political and legal risks related to our
international operations; the costs and effects of complying with laws
and regulations relating to the environment and to the manufacture,
storage, distribution, sale and use of our products; the occurrence of
litigation or claims, including related to the Deepwater Horizon oil
spill; our ability to develop competitive advantages through innovation;
difficulty in procuring raw materials or fluctuations in raw material
costs; our substantial indebtedness; our ability to acquire
complementary businesses and to effectively integrate such businesses;
restraints on pricing flexibility due to contractual obligations;
pressure on operations from consolidation of customers, vendors or
competitors; public health epidemics; potential losses arising from the
impairment of goodwill or other assets; potential loss of deferred tax
assets; potential class action lawsuits; the loss or insolvency of a
major customer or distributor; acts of war or terrorism; natural or
man-made disasters; water shortages; severe weather conditions; and
other uncertainties or risks reported from time to time in our reports
to the SEC. In light of these risks, uncertainties, assumptions and
factors, the forward-looking events discussed in this communication may
not occur. We caution that undue reliance should not be placed on
Forward-Looking Statements, which speak only as of the date made. Ecolab
does not undertake, and expressly disclaims, any duty to update any
forward-looking statement whether as a result of new information, future
events or changes in expectations, except as required by law.
(ECL-A)
Ecolab Inc.
Michael J. Monahan, 651-293-2809
or
Lisa L.
Curran, 651-293-2185
Source: Ecolab Inc.
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