ECL Ecolab Inc

In a bid to expand its rapidly growing Brazilian institutional business, U.S. cleaning and sanitation products major Ecolab Inc (ECL) has scooped up Sao Paulo-based Econ Industria e Comercio de Produtos de Higiene e Limpeza Ltda, which provides cleaning and sanitizing products and services to the foodservice industry in Brazil.

Ecolab, in its press release, stated that the newly acquired entity has sales of roughly $9 million. The Minnesota-based company noted that it will integrate the acquired business with its existing Brazilian institutional business. However, it has not divulged the financial terms of the deal. The acquisition is expected to boost Ecolab’s service capacity and scale while improving customer coverage and relationships.

Ecolab is on an acquisition spree, which is evident from its back-to-back buyouts to expand its global healthcare business. The company, in late 2011, bought the InsetCenter pest elimination business in Brazil for an undisclosed price. Earlier, Ecolab closed its $8.3 billion acquisition of Illinois-based water treatment services major Nalco Holding. The company also bought Italian health care products maker Esoform.

Ecolab caters products and services to the hospitality, foodservice, institutional and industrial markets across more than 160 countries. To spur growth, the company continues to invest in strategic areas such as product innovation, healthcare, water and energy and global pest elimination.

Moreover, Ecolab remains focused on bringing new technologies aimed at reducing food safety risks. Moreover, the company is aggressively pursuing acquisition to expand into emerging markets for growth. Latin America remains a key growth engine for the company’s overseas operation.

Although we are impressed by Ecolab’s strong international exposure, we remain cautious about aggressive competition from the likes of Clorox (CLX) and Church & Dwight (CHD). Raw material price inflation also remains a headwind. We currently have a Neutral recommendation on Ecolab, which is supported by a Zacks #3 Rank (Hold).

 
CHURCH & DWIGHT (CHD): Free Stock Analysis Report
 
CLOROX CO (CLX): Free Stock Analysis Report
 
ECOLAB INC (ECL): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research