Praxair has announced it has entered into an agreement to acquire NuCO2 INC. from Aurora Capital Group, a Los Angeles, California based private equity firm, for $1.1bn in cash.
The transaction is subject to customary conditions to closing, including regulatory approval, and is expected to close by the end of the first quarter of 2013.
NuCO2 is the leading national provider of beverage carbonation solutions in the United States to the restaurant and hospitality industries with 162,000 customer locations and 900 employees. The business is expected to generate full year sales in 2013 of about $250m and EBITDA of about $115m. The acquisition is expected to be neutral to slightly accretive to Praxair’s 2013 earnings per share.
The NuCO2 micro-bulk beverage carbonation solution is the service model of choice for quick service restaurants and convenience stores offering fountain beverages. The micro-bulk solution is more cost effective than conventional high-pressure cylinders, more reliable, and less labour intensive for the customer. Additionally, NuCO2 is expanding its product offering for establishments with draught and craft beers to include nitrogen generators and blending control systems, which improve draught beer consistency and reduce waste.
“NuCO2 offers a compelling value proposition for beverage carbonation,” said Eduardo Menezes, executive vice president of Praxair. “We plan to continue to grow the business in the United States, enhance distribution efficiency utilising Praxair’s competencies in logistics, and extend NuCO2’s offerings to customers in other regions of the world,” added Menezes.