Leading manufacturer of cleaning and sanitation products
), has entered into an agreement to acquire AkzoNobel's Purate
franchise in order to expand its Global Water business. No
financial details of the deal have been provided by the company.
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Purate is a producer of chlorine dioxide which is used as an
antimicrobial agent in cooling towers and other industrial water
treatment applications. Ecolab plans to use Purate's patented
technology with its own 3D Trasar cooling water technology, which
is an automated system used to clean industrial waters in a
3D Trasar technology has been developed by Nalco, which Ecolab
took over in Dec 2011. Following the acquisition, this technology
has been incorporated into Ecolab's new division, the Global
Water segment. The 3D Trasar technology has received the U.S.
Presidential Green Chemistry Award based on its ability to save
water and energy as well as reduce operating cost.
In the last reported fourth quarter of 2012, Global Water sales
were up 3% on a constant currency pro forma basis to $536.2
million. Higher sales reported in Latin America, Asia-Pacific and
Canada along with modest improvement in Europe, led to revenue
Ecolab serves the food service, food and beverage processing,
healthcare, energy, water treatment and hospitality markets both
in the U.S. as well as internationally. The company continues to
invest in strategic areas such as health care, food, water and
energy and global pest elimination to expand its business.
With a background of robust growth, Ecolab is poised to gain
momentum via its aggressive strategy of pursuing acquisitions.
Recently, Ecolab acquired Champions to become a giant in the
oilfield chemical business and reduce competition for its Nalco
Although we are impressed by Ecolab's strong international
exposure, we remain cautious about aggressive competition.
Challenging economic and market trends in 2013 together with
unfavorable internal issues will likely be near-term headwinds
for the company. Raw material price inflation also remains a
cause of concern.
Ecolab currently has a Zacks Rank #3 (Hold) and is slated to
report its first quarter 2013 earnings results tomorrow, Apr 30.
Other chemical-specialty companies such as
Minerals Technologies Inc.
Prospect Global Resources, Inc.
) warrant a look. All the stocks carry a Zacks Rank #2 (Buy).