Ecolab Gets New Credit Lines - Analyst Blog
14 Settembre 2011 - 4:45PM
Zacks
Leading cleaning and sanitation
products company Ecolab Inc (ECL) recently stated
that it has arranged a committed bank financing worth $3.5 billion,
which will enable it to fund the acquisition
of water treatment company Nalco Holding
Company (NLC).
The Minnesota-based company has
entered into a new $2 billion 364-day revolving credit facility and
a $1.5 billion five-year revolving credit facility. Ecolab noted
that it will utilize these credit facilities for general corporate
purposes, including share buybacks, debt repayments and
acquisitions. Notably, the senior credit facilities will be used to
finance the Nalco buyout.
Ecolab announced that it would buy
Nalco in July 2011. The company recently received antitrust
clearance for
the acquisition. The transaction, which is now subject to
approval of the shareholders of both the companies and other
customary closing conditions, is expected to close in fourth
quarter 2011. Following the deal closure, Nalco will merge with a
subsidiary of Ecolab.
The deal is a strategic fit and
highly complementary for Ecolab as it will bolster its water
management business. It marks the union of Nalco's market
leadership in water and energy services with Ecolab's competency in
food safety and cleaning.
Ecolab caters products and services
for the hospitality, foodservice, institutional and industrial
markets. It leads in cleaning, sanitizing, pest elimination and
food safety solutions with revenues of $6 billion.
Ecolab’s strong
international exposure (especially in emerging markets) and
recovery across its end-markets are encouraging. However,
aggressive competition and raw material inflation remain concerns.
Currently, we have a long-term Neutral rating on Ecolab,
which is backed by a short-term Zacks #3 Rank (Hold).
ECOLAB INC (ECL): Free Stock Analysis Report
NALCO HLDG CO (NLC): Free Stock Analysis Report
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