01—Abstract
Summary
Summary of the 8-K filed December 12, 2001. Cited figures are marked; the original filing is the authoritative source.
Ecolab Inc. (ECL) has filed an 8-K report detailing the acquisition of the remaining 50 percent of its Henkel-Ecolab joint venture from its partner, Henkel KGaA.
This transaction, effective November 30, 2001, consolidates full ownership of the European cleaning and sanitizing business under Ecolab. The acquisition was financed through the issuance of short-term Euro-denominated notes, which Ecolab intends to retire using proceeds from newly established revolving credit facilities totaling $450 milliona. These facilities will also support general corporate purposes and potentially future long-term debt issuance.
The consolidation of Henkel-Ecolab will result in its assets, liabilities, revenues, and cash flows being fully integrated into Ecolab's consolidated financial statements. The agreement also includes provisions for continued service arrangements from Henkel for up to two years and specific intellectual property licensing terms. Notably, Henkel remains a significant shareholder in Ecolab, holding approximately 27.6%b of outstanding common stock, and retains the right to nominate directors proportional to its ownership.
02—Key points
Key Highlights
- Ecolab acquired the remaining 50% of the Henkel-Ecolab joint venture, consolidating full ownership of the European cleaning and sanitizing business.
- The acquisition price was approximately 483.6 million Euro (around $433 million USD) as of November 30, 2001.
- The transaction was financed by short-term Euro-denominated notes bearing interest at 3.73708%, with plans to retire them using commercial paper or future debt.
- Ecolab secured $450 million in new credit facilities (a 364-day and a 180-day revolving credit facility) to facilitate the repayment of the notes and for general corporate purposes.
- Henkel KGaA remains a substantial shareholder with approximately 27.6% ownership and has rights to nominate directors to Ecolab's Board.
- The acquisition will lead to the full consolidation of Henkel-Ecolab's financial results into Ecolab's consolidated statements.
- An intellectual property agreement was finalized, granting licenses for the use of certain trademarks and patents between Ecolab and Henkel.
03—Questions
Frequently Asked Questions
What is the primary purpose of this 8-K filing for Ecolab Inc.?
The primary purpose of this 8-K filing is to report Ecolab's acquisition of the remaining 50 percent ownership interest in the Henkel-Ecolab joint venture from its partner, Henkel KGaA. This consolidates full ownership of the European operations of Henkel-Ecolab under Ecolab.
How did Ecolab finance this acquisition?
Ecolab financed the acquisition by issuing Euro-denominated notes to Henkel, totaling approximately 483.6 million Euro. The company intends to repay these notes at or before maturity using proceeds from its newly established $450 million in revolving credit facilities and potentially by issuing U.S. dollar commercial paper.
What is Henkel's ongoing relationship with Ecolab after this transaction?
Despite divesting its stake in the joint venture, Henkel KGaA remains a significant shareholder, holding approximately 27.6% of Ecolab's common stock. Henkel also retains the right to nominate directors to Ecolab's board proportional to its ownership and will continue to provide certain services to Ecolab's European businesses for up to two years.
How will the acquisition impact Ecolab's financial reporting?
Upon acquisition, the legal entities comprising Henkel-Ecolab became wholly-owned by Ecolab. Consequently, their assets, liabilities, revenues, expenses, and cash flows will be fully reflected and consolidated into Ecolab's consolidated financial statements from the acquisition date forward.
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