With operations in more than 150 countries, Naperville, Ill.-based Nalco calls itself the world's leading water treatment and process improvement company, offering water management sustainability services focused on industrial, energy and institutional market segments. Nalco sales were $4 billion in 2010.
Based on transaction terms, Nalco shareholders will have an option to receive either 0.7005 shares of Ecolab common stock or $38.80 per Nalco share in cash, without interest, subject to proration such that the overall consideration paid to Nalco shareholders will be approximately 70 percent in Ecolab shares and 30 percent in cash. The stock component of the consideration will represent a tax-free exchange.
Ecolab will issue approximately 68.9 million shares of Ecolab stock and pay approximately $1.6 billion in cash to Nalco shareholders. This represents a fully-diluted offer value for Nalco’s equity of $5.4 billion and, inclusive of $2.7 billion in Nalco net debt, a total transaction value of $8.1 billion.
The transaction is expected to close in the fourth quarter, subject to customary closing conditions, regulatory clearance, as well as approval of both Ecolab and Nalco shareholders.
“This merger is a strong and vital step in broadening our business platform and enhancing our global growth opportunities,” said Douglas Baker, Jr., Ecolab’s chairman, president and CEO. “The key to Ecolab’s long record of consistent and above-average growth has been our ability to continually expand the markets we serve, meet the needs of the customers within these markets, and execute.
“Through our participation in the water sector and our strategic planning work, we identified water management as a key future growth segment for us given its growth characteristics and importance to our customers,” he added.