The world of fluid management and water management continues to see consolidation. This morning came news that Nalco Holding Company (NYSE: NLC) has entered into a definitive merger agreement with Ecolab Inc. (NYSE: ECL). The goal of the $5.4 billion combination is to create a global leader in the markets of cleaning, sanitizing and water management. The combined entity will serve institutions and enterprises in the industrial, energy, and oil and gas.
The combined entity is expected to have annual revenues of roughly $11 billion. The deal also values Nalco at $38.80 per share, which is a 34% premium to yesterday’s closing price of Nalco. Nalco’s shareholders get to choose a cash-out or a stay-in as Ecolab is giving shareholders the option to either receive 0.7005 shares of Ecolab common stock per Nalco share, or they can choose to receive $38.80 in cash. The overall mix of consideration paid to Nalco shareholders will be approximately 30% cash and 70% stock.
Ecolab noted that it will issue about 68.9 million shares of Ecolab stock and that it will pay out about $1.6 billion in cash. As part of the deal, there is also the assumption of about $2.7 billion in debt, making the enterprise value of the deal come to about $8.1 billion.
In the announcement, Nalco also announces record preliminary second quarter sales estimates and it raised guidance for 2011. The transaction has been approved by both boards of directors.
As of the close, Nalco was valued at $4 billion with its $28.87 share price and the 52-week range was $21.98 to $32.62. This buyout represents all-time highs. Ecolab shares closed at $55.39 with a market cap of $12.85 billion and its 52-week trading range is $46.05 to $57.19.
JON C. OGG
The #1 Thing to Do Before You Claim Social Security (Sponsor)
Choosing the right (or wrong) time to claim Social Security can dramatically change your retirement. So, before making one of the biggest decisions of your financial life, it’s a smart idea to get an extra set of eyes on your complete financial situation.
A financial advisor can help you decide the right Social Security option for you and your family. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.
Click here to match with up to 3 financial pros who would be excited to help you optimize your Social Security outcomes.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.