Ecolab's Acuisition Offer For Laboratoires Anios Evaluated By Barclays

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Barlcays provided its analysis on
Ecolab Inc.ECL
's proposed offer to acquire
Laboratoires Anios
, a European healthcare and hygiene company. According to the analysts, the sale price will be around $500 million, assuming a low-DD EBITDA multiple on a high-teens margin business.

Barclays provided its estimated key benefits of the deal, including:

    1. Helping scale healthcare toward targeted $1 billion
    2. Complementary products: very similar offerings in healthcare (the majority) as well as institutional/F&B
    3. Expanded geographic footprint — Ecolab's healthcare is more North America-based (~60 percent), while Anios has no North American presence, but better reach into West Europe (bulk of sales) as well as international (20 percent of revenues)
    4. Attractive financials — MSD top-line growth (which ECL can likely improve via its corporate accounts team) and good margins (assuming same or better than Ecolab healthcare; which itself is greater than the corporate average).

Related Link: Ecolab Makes Binding Offer To Acquire Anios, Terms Not Disclosed

According to the analysts, Anios will make the Ecolab's already improving core healthcare business even stronger. Ecolab's long-term focus is on better leveraging its corporate account teams to move the point of sale within the healthcare away from individual hospitals to the healthcare system HQs. As per the analysts, the speed of this transition will be a major determinant of the company's healthcare business growth.

Barclays currently has an Overweight rating on the company with a $120 price target. At time of writing, Ecolab was trading up 1.53 percent on the day at $118.58.

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Posted In: Analyst ColorLong IdeasNewsHealth CarePrice TargetReiterationM&AAnalyst RatingsTrading IdeasGeneralBarclaysLaboratoires Anios
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