Offering a ‘compelling value proposition’ for beverage carbonation, Praxair has entered into an agreement to acquire NuCO2 Inc. from Aurora Capital Group in a deal worth around $1.1bn.
NuCO2 is the leading national provider of beverage carbonation solutions in the US to the restaurant and hospitality industries, with 162,000 customer locations and 900 employees.
Such is the company’s network and capabilities that Eduardo Menezes, executive vice-president of Praxair, commented, “NuCO2 offers a compelling value proposition for beverage carbonation.”
“We plan to continue to grow the business in the United States, enhance distribution efficiency utilizing Praxair’s competencies in logistics, and extend NuCO2’s offerings to customers in other regions of the world.”
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 labor 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 is expected to generate full year sales in 2013 of around $250 million and EBITDA of around $115 million. 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 was itself the subject of M&A activity in 2009, but as the purchaser, as the company acquired the beverage division of Memphis-based nexAir. The division had previously brought in around $13 million of nexAir’s annual company revenue of $110 million.