Ecolab Collaborates with ARAMARK - Analyst Blog

By Zacks | December 21, 2012 AAA

Leading cleaning and sanitation products maker, Ecolab Inc. (ECL) recently entered into a collaboration agreement with Philadelphia-based privately-owned facilities management service provider, ARAMARK. As per the deal, ARAMARK will be using Ecolab's Hydris technology to expand its Blue Cleaning program.

Ecolab's Hydris Systems produce electrolyzed water used to sanitize almost all sorts of surfaces. The safe and effective device comprises three daily cleaning products and can be utilized as a disinfection cleaner, a floor cleaner as well as an all-purpose sanitizer/glass cleaner.

ARAMARK's Blue Cleaning program uses eco-friendly Electrically Activated Water (EAW) to clean specific surfaces like floors, carpets and hard surfaces. Along with Ecolab's Hydris technology, ARAMARK's program can be extensively used to clean more varieties of surfaces. Further, the Blue Cleaning program will be used to disinfect places of all sizes such as universities, schools, convention centers and more.

St. Paul, Minnesota-based Ecolab offers products and services to the hospitality, foodservice, institutional and industrial markets across more than 160 countries. To spur growth, the company continues to invest in strategic areas such as product innovation, healthcare, water and energy and global pest elimination.

Ecolab remains focused on bringing new technologies aimed at reducing food safety risks. Moreover, the company is aggressively pursuing acquisitions to expand into faster-growing markets. Latin America remains a key growth engine for the company's overseas operations.

Although we are impressed by Ecolab's strong international exposure, we remain cautious about currency fluctuations and aggressive competition from the likes of The Clorox Company (CLX) and Church & Dwight Co. Inc. (CHD). Sluggish European markets and raw material price inflation also remain headwinds.

We currently have a Neutral recommendation on Ecolab. The stock carries a short-term Zacks #3 Rank (Hold rating).

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