Jefferies Reports ECL May Bid on NLC

Jefferies has issued a report that Ecolab ECL may bid on Nalco NLC. According to the report, "According to media reports, Ecolab may be poised to bid around $35/share for Nalco. While such a deal would satisfy several of Ecolab's strategic goals, it has not yet been confirmed. We estimate such a deal could be earnings neutral in the first year before deal amortization and could deliver an 11% ROIC after synergies, though the combined entity would be levered at 3.9x Debt/2011E Pro Forma EBITDA." ECL has a Hold Rating and a $53 Price Target. ECL closed yesterday at $55.39 a share.