Ecolab Acquires German Pest Service Provider - Analyst Blog

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Ecolab Inc. ( ECL ) expanded its footprint in Europe by acquiring Germany's leading commercial pest elimination service provider, AK Kraus & Hiller Schädlingsbekämpfung. Following the announcement, shares of the company rose 1.3% yesterday.

ECL supports more than 127,000 customers in pest management. Its Integrated Pest Elimination (IPE) approach combines IPE techniques with zero pest tolerance.

ECL believes the acquisition will be able to establish itself as a global leader in commercial pest elimination services industry. Annual revenues of AK Kraus & Hiller Schädlingsbekämpfung amount to $4 million.

ECL's adjusted earnings per share (excluding special gains and charges) of $1.04 for the fourth quarter of 2013 rose about 17% from 89 cents in the same quarter of 2012 but missed the Zacks Consensus Estimate by a penny.

The rise in adjusted earnings was attributable to strong sales growth and operating margin gains owing to cost efficiency programs and synergies. Adjusted net earnings rose nearly 20% to $318.4 million from $265.9 million in the fourth quarter of 2012.

Revenues grew 16.9% year over year (18% at constant exchange rate or CER) to $3,559.5 million. Excluding acquisitions and divestures, adjusted fixed currency revenues increased 6%. Revenues were slightly higher than the Zacks Consensus Estimate of $3,537 million.

For the first quarter of 2014, ECL expects adjusted gross margin of 46% and adjusted earnings per share of 71 to 75 cents. The Zacks Consensus Estimate of 74 cents for the quarter lies within the guided range.

For full year 2014, ECL anticipates adjusted gross margin of 46% and higher adjusted earnings per share between $4.10 and $4.20 compared with 2013. The Zacks Consensus Estimate of $4.17 for the year lies within the guided range.

ECL currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Globe Specialty Metals, Inc. ( GSM ), NewMarket Corp. ( NEU ), and Sensient Technologies Corp. ( SXT ). All of them carry a Zacks Rank #2 (Buy).



ECOLAB INC (ECL): Free Stock Analysis Report

GLOBE SPECIALTY (GSM): Free Stock Analysis Report

NEWMARKET CORP (NEU): Free Stock Analysis Report

SENSIENT TECH (SXT): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: IPE , ECL , GSM , NEU , SXT

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