Oilfield services provider Apergy Corp. will merge with the upstream energy business of specialty chemical company Ecolab Inc. subsidiary Nalco Champion LLC.
The combined entity is expected to have pro forma sales of roughly $3.5 billion for the year and adjusted EBITDA of about $615 million, according to a Dec. 19 news release. The deal values Nalco Champion's upstream business, which is being renamed ChampionX, at $4.4 billion.
Upon deal closing, Apergy will issue about 127 million shares to Ecolab shareholders and assume net debt of about $492 million.
In addition, ChampionX entered into a $537 million term loan facility, the proceeds of which will be used to pay about $492 million to Ecolab, according to the release.
The combined company will be led by Apergy President and CEO Sivasankaran Somasundaram, who be the president and CEO; Apergy CFO Jay Nutt, who will be CFO; and Deric Bryant, executive vice president and president of Ecolab's upstream energy business, who be COO. Ecolab will also designate two new directors to Apergy's board. Apergy Board Chair Daniel Rabun will be the chairman of the combined company.
The transaction is tax-free and expected to close by the end of the second quarter of 2020.
Centerview Partners LLC and Lazard served as financial advisers, while Weil Gotshal & Manges LLP served as legal counsel to Apergy. BofA Securities and Skadden Arps Slate Meagher & Flom LLP served as the financial adviser and legal counsel to Ecolab, respectively.