Apergy Completes ‘Alluring’ ChampionX Merger

Apergy Corp. completed its multibillion-dollar merger with the upstream business of Ecolab Inc. on June 3, resulting in the launch of ChampionX Corp.

“Today we are proud to launch ChampionX, a company that will be an essential player and long-term winner in the oil and gas industry,” Sivasankaran “Soma” Somasundaram, president and CEO of ChampionX, said in a statement on June 3. “Our combined company will be a strong and resilient organization with a broad geographic footprint, high quality customer base, and significant recurring revenue.” 

The merger combined Apergy with Ecolab’s Nalco Champion business, renamed ChampionX Holding. The combined product lines comprise offerings of artificial lift, production chemicals and digital technology.

In association with the transaction, Apergy changed its name to ChampionX Corp. Its shares began trading on the New York Stock Exchange under the symbol “CHX” on June 4.

Apergy and Ecolab announced the transaction, which including the assumption of debt was valued at $4.4 billion, in a joint release last December. The companies expected the combined company to generate pro forma revenue of about $3.5 billion with annual run-rate cost synergies of $75 million.

The transaction resulted in existing ChampionX Holding equity holders owning approximately 62% of ChampionX on a fully diluted basis, with Apergy equity holders prior to the merger owning approximately 38% of ChampionX on a fully diluted basis.

Analysts with Tudor, Pickering, Holt & Co. (TPH), which described the merger as “alluring” in a June 4 research note, said they were encouraged to see Ecolab shareholders heavily oversubscribe for the deal.

“We continue to believe that CHX’s earnings stream will outperform most (all) other public OFS companies through the cycle and their free cash flow profile will prove resilient,” TPH analysts wrote in the note. “We also fancy the industry structure surrounding drilling technologies and ChampionX’s production chemicals business.”

In addition to the seven directors which formed the board of directors of Apergy prior to the completion of the transaction, ChampionX also appointed on June 3 Heidi Alderman, former BASF Corp. executive, and Denham Capital founder Stuart Porter to its board.