) has further postponed the acquisition of Permian Mud Service,
the parent company of Champion Technologies and Corsicana
Technologies. In Oct 2012, Ecolab had agreed to acquire privately
owned Champion Technologies and its related company Corsicana
Technologies in a cash and stock deal worth $2.16 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. Now, the company has further pushed back
the closing date to Apr 15, 2013 as it was unable to solve the
issue in the stipulated time.
The Champion deal would be the company's largest acquisition
since the Nalco buyout. The proposed acquisition will beef up
Ecolab's Global Energy Services franchise and expand its
footprint in the North American energy market. Following the
closure, the company is slated to become a giant in the oilfield
Given Ecolab's strong business fundamentals and vast experience
in successfully acquiring large entities, we believe that the
company will be able to overcome these acquisition related
glitches. The news did not affect investor confidence on this
global cleaning and sanitation products maker, as reflected by
the relatively unchanged share price on Wednesday, Mar 27, 2013.
However, the deal will no longer be accretive to 2013 earnings by
12 cents as predicted earlier. Ecolab currently has a Zacks Rank
While we remain on the sidelines until the closure of the deal,
other chemical-specialty companies such as
HB Fuller Co.
Prospect Global Resources, Inc.
) warrant a look. While Balchem is a Zacks Rank #1 (Strong Buy)
stock, the other two carry a Zacks Rank #2 (Buy).
BALCHEM CP CL-B (BCPC): Free Stock Analysis
ECOLAB INC (ECL): Free Stock Analysis Report
FULLER(HB) CO (FUL): Free Stock Analysis
PROSPECT GLOBAL (PGRX): Free Stock Analysis
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