Ecolab Inc. has agreed to sell the assets of its Ecolab Vehicle Care business to Zep Inc. for approximately $120 million. Atlanta-based Zep makes cleaning and maintenance solutions for commercial, industrial, institutional and consumer end-markets.
Ecolab's vechicle care business has approximately $66 million in annual sales and an adjusted EBITDA of $13 million for the twelve months ended June 30. Zep will combine the business with its existing vehicle wash operations to create a new platform company, Zep Vehicle Care, that Zep estimates will be approximately 13 percent of its overall sales. Zep has annual sales of approximately $645 million.
"This transaction creates a dynamic and compelling sales and marketing platform for the $1 billion U.S. vehicle care marketplace," said John Morgan, chairman, president and chief executive officer of Zep Inc., in a press release. "The greater scale and diverse offerings of the new Zep Vehicle Care will enable us to capitalize on growth opportunities and further enhance shareholder value."
Zep Vehicle Care -- to be based in Minnesota -- will be a leading provider of vehicle care products, including soaps, polishes, sealants, wheel and tire treatments and air fresheners to professional car washes, convenience stores, auto detailers, and commercial fleet wash customers.
"This sale enables us to sharpen our strategic focus on our core business areas," said Ecolab chairman and CEO Douglas Baker in the company's release. "In addition, our Vehicle Care colleagues will be part of a business in which they will be more closely aligned and have access to the tools and resources that will support growth; we thank them for their many contributions and wish them every success in the future."
Last week, St. Paul-based Ecolab announced a $2.2 billion acquisition of Houston-based Champion Technologies, a maker of specialty chemicals for the oil and gas industries, as part of Ecolab's push to expand in the energy industry.
Distributed by MCT Information Services
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