St. Paul-based Ecolab is buying a company that will boost the cleaning products maker's presence in the oil business.
Ecolab has agreed to acquire Champion Technologies of Texas for about $2.2 billion in cash and stock. Ecolab spokesman Michael Monohan said Champion helps energy companies tap oil and gas deposits that are harder to access and require more processing to remove impurities.
"It's providing chemistry that is used in oil field production to treat the oil that is coming out, separate the water, treat it for corrosion, scale so that you protect the assets of the oil well and you're able to treat it [the oil] for use it in the refinery," Monohad said.
Edward Jones analyst Jeff Windau said the deal look like a good one.
"It's going to expand their energy services business, which will provide some good longer-term growth opportunities," Windau said. "I think the valuation was reasonable. They paid a fair price. It's a very strategic kind of deal. I think it's a pretty nice fit for them."
The deal is expected to close by the end of this year and add to Ecolab's earnings next year. With the Champion acquisition, about a quarter of Ecolab's business will be in the energy sector. Other key sectors for the company are water treatment, food safety and sanitation.