Ecolab Amends Champion Purchase to Exclude Refinery Unit
Ecolab Inc. (ECL), the largest maker of cleaning chemicals for hotels and restaurants, amended its agreement to buy Champion Technologies Inc. to exclude a unit that sells water-treatment chemicals to refiners.
The units will be spun off to shareholders of Permian Mud Service Inc., the parent of Houston-based Champion Technologies, according to a statement today. Ecolab, based in St. Paul, Minnesota, agreed to buy Champion for $2.2 billion in cash and stock on Oct. 12 in a bid to become the largest supplier of oil- field chemicals in North America. The amended agreement reduces the value of the transaction to $2.16 billion.
“When we announced the deal, we made it very clear we were focused on the upstream part, which is a very stable and growing part of the business,” Lisa Curran, an Ecolab spokeswoman, said in an interview. “The downstream portion is a very small part of the business, and it’s not a strategic part of what we’re going after.”
The downstream, or refining, business had sales of about $50 million last year. Its exclusion won’t “have a significant impact” on the economics of the deal, which is expected to close by the end of the year. Ecolab said it still sees the purchase adding 12 cents a share in adjusted earnings next year.
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