In a bid to expand its rapidly growing Brazilian institutional
business, U.S. cleaning and sanitation products major
Ecolab Inc
(
ECL
) has scooped up Sao Paulo-based Econ Industria e Comercio de
Produtos de Higiene e Limpeza Ltda, which provides cleaning and
sanitizing products and services to the foodservice industry in
Brazil.
Ecolab, in its press release, stated that the newly acquired
entity has sales of roughly $9 million. The Minnesota-based company
noted that it will integrate the acquired business with its
existing Brazilian institutional business. However, it has not
divulged the financial terms of the deal. The acquisition is
expected to boost Ecolab's service capacity and scale while
improving customer coverage and relationships.
Ecolab is on an acquisition spree, which is evident from its
back-to-back buyouts to expand its global healthcare business. The
company, in late 2011, bought the InsetCenter pest elimination
business in Brazil for an undisclosed price. Earlier, Ecolab closed
its $8.3 billion acquisition of Illinois-based water treatment
services major Nalco Holding. The company also bought Italian
health care products maker Esoform.
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 is
aggressively pursuing acquisition to expand into emerging markets
for growth. Latin America remains a key growth engine for the
company's overseas operation.
Although we are impressed by Ecolab's strong international
exposure, we remain cautious about aggressive competition from the
likes of
Clorox
(
CLX
) and
Church & Dwight
(
CHD
). 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).
CHURCH & DWIGHT (
CHD
): Free Stock Analysis Report
CLOROX CO (
CLX
): Free Stock Analysis Report
ECOLAB INC (
ECL
): Free Stock Analysis Report
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