Ecolab Inc. (ECL:US), the largest maker of cleaning chemicals for hotels and restaurants, amended its agreement to buy Champion Technologies Inc. to exclude a unit that sells water-treatment chemicals to refiners.
The units will be spun off to shareholders of Permian Mud Service Inc., the parent of Houston-based Champion Technologies, according to a statement today. Ecolab, based in St. Paul, Minnesota, agreed to buy Champion for $2.2 billion in cash and stock on Oct. 12 in a bid to become the largest supplier of oil- field chemicals in North America. The amended agreement reduces the value of the transaction to $2.16 billion.
“When we announced the deal, we made it very clear we were focused on the upstream part, which is a very stable and growing part of the business,” Lisa Curran, an Ecolab spokeswoman, said in an interview. “The downstream portion is a very small part of the business, and it’s not a strategic part of what we’re going after.”
The downstream, or refining, business had sales of about $50 million last year. Its exclusion won’t “have a significant impact” on the economics of the deal, which is expected to close by the end of the year. Ecolab said it still sees the purchase adding 12 cents a share in adjusted earnings next year.
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