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Ecolab's Chemstar Buyout to Boost Food & Beverage Business

Zacks Equity Research

Ecolab Inc. ECL recently acquired Chemstar Corporation with a view to expand its Food & Beverage unit. The deal value has been kept under wraps.

For investors’ notice, privately-held Chemstar is a supplier of food safety, cleaning and sanitizing solutions focused on the grocery and food retail markets. Notably, Chemstar’s flagship product, Sterilox Fresh, has been driving the company’s top line and is much in demand in both the United States and Canada.

Per management at Ecolab, Sterilox Fresh produces treatment solutions to help the food retail industry meet increasing consumer demand for fresh food and floral products.

Into Ecolab’s Food & Beverage Unit

At the Food & Beverage unit, Ecolab serves the Beverage processing, Cheese processing, Meat, Poultry & Seafood, Biofuels & Ethanol, Dairy Processing, Brewery & Winery and Food Processing markets.

Notably, Ecolab’s Food & Beverage offerings fall under the Global Institutional revenue segment.

In the recently-reported second quarter of 2019, Ecolab’s Global Institutional revenues rose 1.2% year over year to $1.31 billion.
In a bid to boost its Food & Beverage unit, Ecolab has acquired Holchem Group  of late. (Read More: Ecolab to Boost Food Safety Standards With Holchem Buyout)

Market Prospects

Per statista, the global Food & Beverage market had a net worth of $93,582 million in 2018. Markedly, the market value is expected to see a CAGR of 10.3% to reach a value of $152,677 million by 2023.

Hence, the latest move has been a well-timed one for Ecolab.

Other key players in this space are IBM IBM, Unilever UN and Procter & Gamble PG. While IBM’s use of blockchain technology in food safety currently faces robust demand, Unilever and Procter & Gamble’s food safety measures also deserve a mention.

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International Business Machines Corporation (IBM) : Free Stock Analysis Report
 
Ecolab Inc. (ECL) : Free Stock Analysis Report
 
Unilever NV (UN) : Free Stock Analysis Report
 
Procter & Gamble Company (The) (PG) : Free Stock Analysis Report
 
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