Zep to Acquire Vehicle Care Division of Ecolab
Will be major provider of soaps, polishes, sealants, treatments, more to c-stores, car washes
Published in CSP Daily News
ATLANTA -- Zep Inc., a leading producer and marketer of a range of cleaning and maintenance solutions, has entered into a definitive agreement to purchase all of the assets of Ecolab Vehicle Care, a division of Ecolab Inc., for approximately $120 million.
Once approved, the combination of Ecolab's Vehicle Care division, Zep's existing North American Sales & Service vehicle wash operations, Niagara and Washtronics will create a new platform, "Zep Vehicle Care," representing approximately 13% of the company's net sales.
Zep Vehicle Care--to be based in Minnesota--will be a major 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.
Zep Vehicle Care will access customers through the direct and distribution channels, and will provide car, truck and fleet wash operators with products for their wash tunnels and facilities as well as retail operations.
Pending regulatory approvals, the purchase is expected to close later this calendar year. Zep will finance the acquisition using existing debt capacity, it said.
"This transaction creates a dynamic and compelling sales and marketing platform for the $1 billion U.S. vehicle care marketplace," said John K. Morgan, chairman, president and CEO of Zep. "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. By combining outstanding vehicle care brands, products and professionals, the formation of Zep Vehicle Care represents another example of our diversification strategy and our disciplined focus within those key markets where we bring unique value and expertise to our customers."
The products and services offered by Zep Vehicle Care will combine leading brands such as Zep Enviroedge, Niagara National, Washtronics and Armor All Professional with Blue Coral, Rain-X and Black Magic.
The new entity will be led by Steve Nichols, the current General Manager of Ecolab Vehicle Care, who will assume the position of President, Zep Vehicle Care, upon closing of the transaction.
"Ecolab's vehicle care products and sales expertise are highly complementary to the products and expertise currently delivered through Zep's existing operations," said Tom Moffett, president of Zep North American Sales & Service. "By joining forces, vehicle care associates from both organizations will enjoy the benefits of a large, well-resourced organization focused on the vehicle care customer. Following the acquisition, our sales and service organization will be able to focus on other important, high-growth markets."
Ecolab's Vehicle Care Division is a leading provider of vehicle care industry branded commercial cleaners, protectants and related products and accessories to the car wash, convenience store, auto dealership and fleet-wash markets in North America. Its 300 products meet customer needs across all segments of the industry. It is based in St. Paul, Minn.
Atlanta-based Zep, with fiscal year 2012 net sales of $654 million, is a leading producer and marketer of a wide range of cleaning and maintenance solutions for commercial, industrial, institutional and consumer end-markets. Zep's product portfolio includes anti-bacterial and industrial hand care products, cleaners, degreasers, deodorizers, disinfectants, floor finishes, sanitizers and pest and weed control products, as well as chemical products for the automotive, fleet maintenance, industrial/MRO supply, institutional supply and motorcycle markets. It markets these products and services under brand names such as Zep, Zep Commercial, Zep Professional, Enforcer, National Chemical, Selig, Misty, Next Dimension, Petro, i-Chem, TimeMist, TimeWick, MicrobeMax, Country Vet, Konk, Niagara National, Washtronics, Washtronics of America, Forward Chemicals, Rexodan and a number of private-label brands.