Ecolab's Mendota Heights Car Wash Division Sold for $120 Million

Atlanta-based Zep Inc. purchased the division and will absorb its 110 employees.

It's been seven years since Ecolab Inc. opened a car-wash products factory in Mendota Heights and now, the Star Tribune is reporting, Ecolab has sold the division to Atlanta-based Zep Inc.

Zep told the Star Tribune it intends to absorb the car-wash division's 110 employees and run the business from Minnesota.

The Star Tribune has more:

Andrew Wittmann, a senior equity research analyst for Robert W. Baird, said Wall Street always looked at car care as being different than Ecolab's other businesses.

Car care "was just not as strategic," Wittmann said. "It didn't have the same ability to differentiate itself and it didn't have the large multinational customer base which are the core tenets of what Ecolab is. ... Investors have been mindful of this for a matter of time. So it was not much of a surprise" that it's selling it off.

Ecolab's car-care unit has grown from $45 million in 2006 sales to about $66 million in 2012 sales. The unit generated about $13 million in earnings and has 110 employees. Those workers will join the ranks of Zep.

"Our vehicle care colleagues will be part of a business in which they will be more closely aligned and have access to the tools and resources that will support growth," Ecolab CEO Douglas Baker said in a statement Wednesday.

While Zep is headquartered in Atlanta, Zep officials intend to run Zep Vehicle Care from Minnesota. Zep, which generated $654 million in fiscal 2012 sales, already sells soaps, polishes, sealants, wheel and tire treatments and air fresheners to professional car washes, convenience stores, auto detailers and commercial fleet wash customers.


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