St. Paul-based Ecolab has announced a $3.7 billion plan to acquire Purolite, a provider of purification solutions that will complement Ecolab's life sciences division.
Purolite is based in King of Prussia, Pa., and employs more than 1,000 people in more than 30 countries. The purchase price is more than nine times Purolite's annual sales of about $400 million a year.
"Purolite is an acquisition that brings us a fast-growing leader in biopharma and industrial purification solutions with very strong margins. With this transaction, we will significantly increase our opportunities in our high growth, high margin life sciences business, such as the purification of mRNA vaccines and monoclonal antibodies for cancer-treatment drugs," said Christophe Beck, Ecolab's president and chief executive, in a release published after stock markets closed.
Beck said combining Ecolab's capabilities in the area with Purolite's "revolutionary" resin technology will result in a "game-changing offering" for the company.
The $3.7 billion deal would be Ecolab's second-largest deal ever by price, second only to the $8.3 billion deal to acquire Nalco in 2011.
The deal would complement Ecolab's life sciences and industrial business, with double-digit growth options, the company said.
Ecolab plans to pay for the deal with $800 million in cash and a low-cost debt. The company said it expects to only realize modest cost synergies from the deal but that it would be neutral to 2022 earnings before it becomes accretive to earnings in 2023.
Purolite is a family-owned company founded in 1981 by brothers Steve and Don Brodie in Don's basement. Both brothers remain active in the company.
Steve Brodie has a background in accounting and finance and is the company's chief executive. Don Brodie is an executive vice president and oversaw the construction of the company's manufacturing plants and has a chemistry degree and a background in the food and chemical industry.
"We are confident that Purolite will be in good hands and that our goals for high growth, innovation and quality will continue under Ecolab's stewardship," Steve Brodie said in the news release.
The deal is expected to close in the fourth quarter. Ecolab is planning a webcast Friday morning to go over more details of the transaction.