Bullish indicating open at $55-$60, IPO prices at $37
ST. PAUL, Minn. - Ecolab Inc. (NYSE:ECL), currently trading near its 52-week high with a market capitalization of $77.57 billion, announced Tuesday it has entered into a definitive agreement to acquire Ovivo Electronics for approximately $1.8 billion in cash, a move aimed at strengthening its position in providing water solutions for semiconductor manufacturing. According to InvestingPro data, Ecolab maintains strong financial health with a "GOOD" overall rating, suggesting solid positioning for this strategic acquisition.
Ovivo Electronics, which is expected to generate sales of $500 million in 2025 and employs over 900 people worldwide, specializes in ultra-pure water technologies essential for producing advanced microchips. This acquisition aligns with Ecolab’s current operational strength, reflected in its $15.72 billion trailing twelve-month revenue and $3.72 billion EBITDA.
The acquisition will more than double the size of Ecolab’s global high-tech water business to approximately $800 million, according to the company’s statement. The combined entity will focus on providing circular water management solutions for microelectronics customers to reduce fresh water consumption while maximizing chip production and quality.
"A single microelectronics fab can consume the drinking water needs of 17 million people per year," said Christophe Beck, chairman and CEO of Ecolab, in the press release. "By integrating Ovivo’s ultra-pure water technologies with Ecolab’s global water, digital and service capabilities, we’re deepening our support for the fast-growing microelectronics and AI sectors."
The transaction is expected to close in the first quarter of 2026, subject to regulatory approvals and customary closing conditions. Ecolab anticipates the acquisition will generate double-digit returns and be immediately accretive to sales growth.
During the first year after completion, the company expects the acquisition to be neutral to adjusted earnings per share, excluding approximately $45 million of non-cash amortization costs. Ecolab projects its net debt to adjusted EBITDA ratio will be approximately 2x following the acquisition, in line with its long-term leverage target.
The company stated that the combined high-tech business is expected to grow at strong double-digit rates with an attractive operating income margin. Ecolab’s current gross profit margin stands at 44%, with a proven track record of maintaining dividend payments for 55 consecutive years. For deeper insights into Ecolab’s financial metrics and growth potential, investors can access comprehensive analysis through InvestingPro’s detailed research reports, which cover over 1,400 US equities.
In other recent news, Ecolab Inc. reported its second-quarter 2025 adjusted earnings per share at $1.89, aligning with the Bloomberg consensus estimate but slightly below Mizuho’s forecast of $1.90. The company continues its tradition of consistent dividend payments, declaring a quarterly cash dividend of $0.65 per common share, payable in October. Mizuho has increased its price target for Ecolab to $314, citing a steady growth outlook. Meanwhile, BMO Capital has lowered its price target to $307, noting that Ecolab’s pricing was not as robust as investors had anticipated. Stifel has reiterated its Buy rating on Ecolab, maintaining a price target of $303, while highlighting the company’s 150 basis points of adjusted EBIT margin expansion year-over-year. Ecolab also announced the appointment of Julie P. Whalen, former CFO of Expedia, to its board of directors, where she will serve on the Audit and Finance Committees. These developments reflect Ecolab’s ongoing efforts to sustain growth and enhance its governance structure.
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