Ecolab has entered into an agreement to acquire Purolite, a fast-growing global provider of high-end ion exchange resins for the separation and purification of solutions, that is highly complementary to its current offering and critical to drug production and biopharma product purification in the life sciences industries.
It also provides purification and separation solutions for critical industrial markets like microelectronics, nuclear power and food and beverage. Based in King of Prussia, PA, Purolite operates in more than 30 countries and employs approximately 1,000 people worldwide, with expected 2021 sales of approximately $0.4 billion.
The acquisition also provides new solutions to further improve Ecolab's water re-use and re-cycling offerings
The acquisition is structured as a cash transaction valued at approximately $3.7 billion. This will utilise approximately $800 million of cash on the company's balance sheet and low-cost debt for the balance. As a result of the structure of the transaction, we expect to realize tax benefits with an estimated net present value of approximately $300 million. Returns are expected to be significantly above our weighted average cost of capital.
Purolite will operate as a separate global business unit and its overall results will be reported within Ecolab's Life Sciences division. The transaction is expected to close in the fourth quarter of 2021, subject to regulatory clearance and other customary closing conditions.
Commenting on the transaction, Christophe Beck, Ecolab's president and CEO said: "With 2021 sales of $0.4 billion and mid-teens growth, 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."
"By combining Ecolab's state-of-the-art capabilities in clean and safe processing with Purolite's revolutionary resin technology, we will provide a comprehensive and game-changing offering that will make the customer's end-product better, safer, healthier and more effective," Beck said. "At the same time, it will further expand our capabilities in industries that are complementary to our already existing leading positions, such as the polishing of advanced microelectronics, ultra-purification of water in nuclear power, food and beverage taste and product quality enhancement, high-end precious metals extraction, like lithium for EV batteries, as well as in the production of hydrogen fuel cells."
Beck added that the acquisition also provides new solutions to further improve Ecolab's water re-use and re-cycling offerings as well as innovative solutions to improve its environmental programmes for customers, such as PFAS remediation.
Also commenting on the transaction, Steve Brodie, Purolite's CEO added: "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."