Ecolab Nears $5 Billion Deal for Nalco

Ecolab, the disinfectants maker, is near a deal to buy the water treatment company Nalco Holding for about $5 billion, a person briefed on the matter said on Tuesday.

Shares in Nalco closed on Tuesday at $28.87, giving it a market value of about $4 billion. Ecolab is expected to also assume Nalco’s long-term debt, putting an enterprise value on the deal of close to $8 billion.

A deal is expected to be announced as soon as Wednesday, though final details had yet to be ironed out and the talks could still fall apart, this person cautioned.

Representatives for Ecolab and Nalco were not immediately available for comment.

Should it succeed in buying Nalco Holding, Ecolab would gain an 83-year-old company specializing in treating the waste generated by industrial companies. Nalco, born of a 1928 merger of two water-treament companies, has grown into a major player in industrial waste treatment.

Among the company’s best-known products is Corexit 9500, an oil dispersant that was used to help clean up the Deepwater Horizon oil spill in the Gulf of Mexico last year.

In 2010, Nalco reported $196.2 million in net income on revenue of nearly $4.3 billion. Its shares have risen 27 percent in the last year.

A Nalco deal would be the largest ever by Ecolab, which makes cleaning products for customers in a broad range of industries, including the restaurant, hospitality and health care sectors. It reported $530.3 million in profit last year and about $6.1 billion in revenue.

The 88-year-old Ecolab, based in St. Paul, Minn., has 26,494 employees.

Ecolab would only be the latest owner for Nalco, which was purchased by Suez of France and then a buyout consortium consisting of the Blackstone Group, Apollo Management and Goldman Sachs’s private equity arm. Nalco returned to the public markets in 2004.

News of the potential deal was reported earlier by The Wall Street Journal online.