A Medical Device Daily
Ecolab (St. Paul, Minnesota) reported that it plans to spend $275 million to buy Microtek Medical Holdings (Alpharetta, Georgia), a firm that makes infection control products for healthcare and acute care facilities.
The company said it would pay $6.30 per share for 43.5 million shares of Microtek, which had $142 million in sales last year.
"This represents another strong step to significantly expand Ecolab's growing presence in healthcare cleaning and infection prevention," said Douglas Baker, Ecolab's president/CEO and chairman.
The agreement has been approved by the boards of directors of both companies, and is subject to the approval of Microtek's shareholders and other customary closing conditions, including regulatory approvals.
Microtek, which makes surgical drapes, fluid control and other surgical supplies, will be combined with Ecolab's existing hand-hygiene, medical-instrument and environmental cleaning and disinfecting business.
Last year, Ecolab reported revenue of about $65 million, or 3% of its United States Cleaning & Sanitizing segement's sales, came from the healthcare market. Revenue in that division grew 4% in 2006 compared to 2005. Ecolab's total revenue last year was about $5 billion.
The company said it expects dilution from the transaction to be about 1 cent per share in 4Q07, but believes its current business momentum will enable it to offset that. As a result, Ecolab said it continues to look for 2007 earnings per share to be in the $1.64 to $1.66 range. It expects dilution from Microtek to represent about 2 cents per share in 2008, and be accretive thereafter.