Published: December 20, 2019 |

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Apergy Corporation and Ecolab have approved a definitive agreement to which Ecolab will separate the upstream energy business of Nalco Champion (which is being renamed ChampionX) and simultaneously combine it with Apergy, creating a scaled, global leader in production-optimization solutions.

The merger combines Apergy with Ecolab’s ChampionX business, which is expected to generate approximately $2.4 billion in revenue in 2019, and consists of the drilling, completion, and energy production, chemistry sciences, and solutions operations currently included within Ecolab’s Energy segment. The downstream chemistry solutions business from Ecolab’s former energy segment will be retained by Ecolab.

Following the completion of the transaction, the combined company will have approximately $3.5 billion in pro forma 2019 sales, with a strong balance sheet and robust free cash flow generation. The combined company will provide greater scale, a larger geographic footprint, enhanced customer touch points, and low leverage supported by strong cash flow generation through the oil and gas cycle.

“This transaction is a great development benefiting both Apergy and Ecolab shareholders. It brings together two well respected companies to create a global leader that provides customers with a full suite of production-optimization solutions, solidifying our position as a focused leader in the production segment, while providing shareholders and employees better long term growth opportunities” said Sivasankaran “Soma” Somasundaram, president and chief executive officer of Apergy.

“The ChampionX business is a ‘top box’ performer within our value creation framework, and will accelerate our strategic goals of broadening our product portfolio and geographic footprint, as well as expanding our customer relationships. The transaction is consistent with our strategic priorities of reducing cyclicality and decreasing leverage. Additionally, the combined company will be on the cutting edge of technology and development in the oilfield with a patent portfolio of over 2,400 global patents. Culturally, our organizations are very similar with a focus on customer centricity, advancement of technology, and continuous improvement. We expect that our cultural alignment will result in a seamless integration. ChampionX has a talented and experienced management team, and I am looking forward to working with them. Post-transaction, we will have over 8,000 talented employees working collaboratively to solve customer problems around the world,” added Somasundaram.

“This transaction is a terrific development for both Apergy and ChampionX. It brings together two established industry leaders, creating a strong and focused entity with an experienced management team, considerable scale and a broader range of solutions that better serve customer needs. These commercial merits, together with the significant synergies expected to be realized through the combination, should drive even more attractive shareholder value for Ecolab shareholders than our original spin plan,” said Douglas M. Baker, Jr., Ecolab’s chairman and CEO.

“This combination should also create more opportunities for our ChampionX associates, whom we thank for their many contributions and wish them every success in the future. Given that we have already been working towards a spinoff of ChampionX, we expect this to be a smooth transition for the business,” added Baker.

“I am excited to be joining with Apergy to drive ChampionX’s future growth. Together our two businesses will offer a compelling value proposition to our production-focused customer base. I believe that our future is brighter together, and I look forward to leading ChampionX as part of the combined company,” said Deric Bryant, current executive vice president and president of Ecolab’s Upstream Energy business.

Management, Board of Directors and Headquarters

The combined company will benefit from the strengths and capabilities of Apergy and ChampionX. Mr. Somasundaram, current Apergy president and chief executive officer, will serve as president and chief executive officer of the combined company. Jay Nutt, current chief financial officer of Apergy, will serve as chief financial officer of the combined company, and Deric Bryant, current executive vice president and president of Ecolab’s Upstream Energy business, will serve as chief operating officer of the combined company. Deric will have responsibility for ChampionX, as well as responsibility for the integration of the two companies and synergy capture.

Additional senior leadership positions for the new company will be named at a later date. The size of the Apergy Board will be increased and two new directors designated by Ecolab will be appointed to the Board. Daniel Rabun, current chairman of Apergy, will serve as chairman of the combined dompany. The combined company will be headquartered in The Woodlands, Texas, and will have operations in over 55 countries.

About Apergy
Apergy is a leading provider of highly engineered equipment and technologies that help companies drill for and produce oil and gas safely and efficiently around the world. Apergy’s products provide efficient functioning throughout the lifecycle of a well - from drilling to completion to production. Apergy’s Production & Automation Technologies offerings consist of artificial lift equipment and solutions, including rod pumping systems, electric submersible pump systems, progressive cavity pumps and drive systems and plunger lifts, as well as a full automation and digital offering consisting of equipment and software for Industrial Internet of Things (IIoT) solutions for downhole monitoring, wellsite productivity enhancement, and asset integrity management. Apergy’s Drilling Technologies offering provides leading polycrystalline diamond cutters and bearings that result in cost effective and efficient drilling.

To stop by Apergy’s website, CLICK HERE

About Ecolab
A trusted partner at nearly three million customer locations, Ecolab (ECL) is the global leader in water, hygiene and energy technologies and services that protect people and vital resources. With annual sales of $15 billion and 49,000 associates, Ecolab delivers comprehensive solutions, data-driven insights and on-site service to promote safe food, maintain clean environments, optimize water and energy use, and improve operational efficiencies for customers in the food, healthcare, energy, hospitality and industrial markets in more than 170 countries around the world.

To stop by Ecolab’s website, CLICK HERE

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