Greetings, and welcome to the Ecolab acquisition of Purolite acquisition conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mike Monahan, Senior Vice President, External Relations. Thank you. You may begin. Thank you. Hello, everyone, and welcome back to Ecolab's second conference call of the week. This time to discuss an exciting acquisition, that of Purolite. With me today is Christophe Beck, Ecolab CEO, and Daniel Schmechel, our Chief Financial Officer. Please take a moment to read the cautionary statements in the press release and slides, which can be found on our website at ecolab.com/investor. These state that this teleconference and the associated supplemental materials include estimates of future performance. These are forward-looking statements and actual results could differ materially from those projected. Factors that could cause actual results to differ are described under the Risk Factors section in our most recent Form 10-K and in our posted materials. We also refer you to the other cautionary statements in the slides, which encourage caution in the use or reliance upon the non-GAAP financial information and industry and market information contained in the slides. Please note, we refer to the transaction slides on our website for this call at ecolab.com/investor. With that, here's Christophe Beck. Thank you so much, Mike, and good morning, everyone. Happy Friday. Good to be back together with you as well during the same week, as mentioned. Because after a very strong quarter and full year outlook for Ecolab, I'm really excited to announce Ecolab's acquisition of Purolite. Let me share with you why we're so excited about that new opportunity, and then we'll open it up to your questions. Purolite is a fast-growing global leader in biopharma and industrial purification and separation solutions with very high margins. Ecolab is all about high profitable growth, as you know, and so is Purolite. This deal is not just about acquiring a high-performing company, it's about helping us create a brand new global growth platform for Ecolab. One that brings together our respective strengths to create new comprehensive solutions for our customers, one that opens up major incremental growth opportunities as we always do in our company. In other words, we're building a major new growth engine to our company as we did with water just a decade ago. Purolite is an extremely attractive acquisition for us as it adds further significant growth opportunities to our already very successful $300 million global life sciences business. A business that we just started five years ago that's growing double-digit with margins north of 30%. At the same time, it will also strengthen our capabilities in industrial, which is pretty cool. It's a strong fit with Ecolab's customer value proposition. They too focus on premium product and service solutions across high-end mission-critical customer applications. They too emphasize corporate account relationships to deliver the best results at the lowest cost. They are leading global provider of high-tech recurring purification and separation solutions that substantially enhance end product quality. While Ecolab focuses on clean production processes and safe environment, Purolite focuses on the core product itself. By combining Ecolab's state-of-the-art capabilities in clean and safe processing with Purolite's revolutionary smart resin technology, we can provide a comprehensive and game-changing offering that will make the end product better, safer, healthier, and more effective while also reducing customers' environmental impact and total cost in fast-growing, highly attractive markets. This unique combination adds a new $5 billion total addressable market and creates additional our famous Circle the Customer- Circle the Globe opportunity for Ecolab. Like we've demonstrated earlier by bringing water and hygiene in food and beverage or pest and cleaning and sanitation in institutional over the years. Bringing together Purolite and Ecolab further deepens and leverages our respective capabilities in the large and very fast-growing life sciences market. In life sciences especially, one of our most successful businesses, Ecolab ensures that processing lines and clean rooms remain clean and safe. While Purolite, once again, ensures end products like drugs, vaccines, and monoclonal antibodies remain pure and safe. Together, we bring the holy grail by protecting the processing lines, the clean room environment, and the end product itself, like vaccines and drugs, and no one else can do this. Also from a geographic perspective, Purolite helps our life sciences business gain critical mass in North America, while Ecolab helps them gain further critical mass in Europe, leading to further growth for both. For instance, out of the top 100 pharma companies out there, only a third of them overlap between Ecolab and Purolite, giving us a slew of large and lucrative new customers to cross-sell, which we know very well how to do. Which is one, and that's why it's one of our largest and quickest single opportunities. In industrial, Purolite brings yet another strong adjacent global growth platform in critical industrial markets like food and beverage, microelectronics, nuclear power, and precious metals. Finally, Purolite helps us to create a new high-growth and high-margin enterprise platform building on our successful life sciences businesses. This is a platform to which we can add further organic business expansion and acquisitions. We've got new breakthrough innovations like differentiated digital offerings to help customers produce even better, safer, and healthier products while reducing their environmental footprint and total cost, which is our value proposition. Bottom line, with Purolite, we're adding a new $400 million global platform, growing double digits at EBITDA margins north of 40%. A new platform that uses our same business model and allows us to deliver even greater value to customers while also generating additional attractive long-term returns for shareholder. Looking closer at the transaction details on slide four, hopefully you can follow with me here. This clearly shows that it's a growth acquisition, not a cost synergy play, which makes it easier as well. From an integration perspective, since there won't be much disruption and risks related to that. Ecolab will pay approximately $3.7 billion in an all-cash transaction, which represents 19x 2022 adjusted EBITDA, reflecting Purolite's strong EBITDA growth trajectory. We also expect to realize tax benefits from the transaction structure with an estimated net present value of $300 million. With this considered, the 2022 EBITDA multiple goes further down to 18x, way lower than what you would pay today for great companies like Danaher and Thermo Fisher that are in the same industry. The transaction is expected to be neutral to our 2022 adjusted EPS and nearly $0.10 accretive to 2023 adjusted EPS, which includes, by the way, an estimated transaction amortization of $0.26 per share. Further, we expect transaction's contribution to our adjusted EPS will show rapid growth beyond 2023. Importantly, this transaction is expected to be accretive to our sales growth, EBITDA margin, and generate attractive returns significantly above our weighted average cost of capital. Now let's take a closer look at Purolite and its exciting growth opportunities on slide five. This business has a very strong track record with sales compounding at a 14% CAGR and OI EBITDA at a 30% CAGR. Purolite is expected to generate nearly $400 million of revenues in 2021, up strong double digits over 2020, driven by very strong double-digit growth in the life sciences markets and high single-digit growth in industrial, which is also generally consistent with Purolite's recent historical performance. Today, the business mix is split roughly 40% life sciences and 60% industrial. However, this mix is increasingly moving toward the life science one, given its very strong market demand and top-line growth in a rapidly expanding market, as you know. As you can see, Purolite is a truly global business, operating in over 30 countries. It's not only a very fast-growing business, but it's also a very profitable business with a 41% adjusted EBITDA margin and a 37% adjusted OI margin expected in 2021, so this year. Now, turning to slide six, Purolite adds a strong adjacent global growth platform to Ecolab by adding $5 billion of new opportunity in fast-growing markets. Roughly $3 billion of that new opportunity sits in the life sciences market, driven by very strong growth in biopharma due to strong demand for emerging technologies to produce monoclonal antibodies, cell and gene therapies, immunological treatments for chronic diseases like cancer and mRNA vaccines like we unfortunately all too well know for COVID-19. As such, biopharma is expected to reach 40% of the total $1 trillion market in just a few years. The other $2 billion of opportunity is in industrial fluid purification, which is extremely complementary to our existing technologies across our water and F&B markets. Purolite's technology and expertise, which is centered on high-end purification and separation applications, creates new opportunities for us to help produce ultrapure water for microelectronics, where we're very strong in, and power generation. These technologies are also used to improve the quality of our customers' food and beverage products even, as well as solutions to address critical environmental issues, and I'll cover that in a second. As shown on slide seven, Purolite shares our same approach to customers. They're passionate and focused on customers, and they have a very similar customer value proposition, a technology-driven sales and service culture with very unique and patented IP and R&D capabilities. They also emphasize corporate account relationships to deliver the best results at the lowest total cost across high-end mission-critical customer applications. As a result, 95% of Purolite's revenue comes from consumable recurring products, as Ecolab does, as you know. Looking at slide eight, Purolite also further enhances our ability to help customers address critical environmental issues. That's even better. The technology brings to us new solutions for our industrial customers that improve the sustainability of many industrial manufacturing processes. For example, they have advanced technologies that improves the remediation of PFAS at a lower cost, which is a market that's gonna grow. It can also remove toxic compounds in wastewater and help reduce VOC emissions. As you can see on slide nine, the global pharma manufacturing market is one of the largest and fastest-growing markets, with biopharma manufacturing being the fastest segment growing at a 15% CAGR. As mentioned earlier, the biopharma therapy market is expected to represent 40% of all drug therapies by 2025 already. It's moving down fast in that direction, which is good for us. New technologies including gene and cell therapy for vaccines like for COVID-19 and personalized medicines are being developed, and these are driving the fast-growing biopharma market in which Purolite is one of only two leading players with arguably the very best technologies. Turning to slide 10, Ecolab and Purolite share a common corporate account sales approach. More importantly, the combination creates an enhanced value proposition for customers by bringing together Ecolab's environmental quality and safety technologies with Purolite's product quality and safety technologies. In other words, Ecolab focuses on the outside, which means the production process and the environment, while Purolite focuses on the inside, yeah, which means the end product as such. We can further maximize customer outcomes which improve human health and safety through higher quality products. We can minimize the environmental impact through reduced water and energy consumption, as well as waste reduction. We can optimize customer costs by improving operational efficiency and manufacturing productivity, being even more of a total solution and therefore more strategic partner to our long-term customers. On slide 11, it shows how Purolite brings important new markets and unique capabilities to Ecolab's life sciences business, which is one of our fastest-growing and most profitable business that has more than doubled over the last four or five years with nearly 30% margins. Purolite adds what we didn't have, a new purification growth platform that expands our combined life sciences opportunity to $10 billion and creates the base for further expansion of the high-growth platform. Together, we now can bring shared value proposition centered on business continuity, risk mitigation, sustainability, and operational efficiency. We also can leverage our respective footprints where Purolite provides a large North American business base while Ecolab's life science business is much larger in Europe, opening new obvious sales synergies. We now have an even broader portfolio to be a more significant provider for customers, and we'll build on that position through further expansion of our offering for the life sciences market. Turning to slide 12, within the biopharma purification market, there are essentially two global players serving fast-growing biopharma customers in a market that's mostly limited by manufacturing capacity. The demand outstrips the supply quite a bit. This is one of the reasons why Purolite is in the process of finalizing new production capacity in Europe and in the U.S. As a result, in a high-demand global market, Purolite will add the equivalent of $500 million of incremental sales capacity and will become the only player with capabilities on both continents, reducing supply risk, especially today, for life-saving industries. Also, Purolite is extremely well-positioned and focused to take share within this growing market as they form key partnerships with many leading pharma companies because of the unique and patented technologies like the agarose jetting technology that substantially improved the purification of monoclonal antibodies while greatly reducing cost and environmental impact. It's also important to note that most of their drug purification solutions are usually part of the FDA drug submission filings, thereby providing high stickiness, or in other words, high customer retention. As you can see on slide 13, the application of Purolite's technologies across our industrial markets is also very attractive as it adds $2 billion of opportunity and further strengthens our market-leading position. Purolite adds very complementary purification technology applications across the microelectronics, power generation, and F&B markets with emerging opportunities to capitalize on the growth, for instance, in electric vehicles through unique lithium extraction technologies. We're very excited by the enhanced position and capabilities Purolite brings us to better serve these critical industries. As mentioned earlier and shown on slide 14, Purolite has a similar value proposition and business model to ours, and we expect to drive very attractive growth synergies by bringing these businesses together as we leverage our large global customer base, enhanced and complementary product technologies, and advance digital offerings, while also accelerating our combined technology and new product innovation. This is the same playbook we have so successfully used over the years with water, with pest elimination, and other Ecolab businesses as we circle the customer with more solutions. As such, Purolite is expected to enhance our long-term financial performance, which Dan now, our CFO, will discuss more on slide 15. Dan, if you can hear us, you would be next. Yes, yes. Good morning and happy Friday. As you can tell, we're incredibly excited about Purolite as a future growth opportunity for Ecolab, and we have the financial metrics to match our excitement. It is accretive to our long-term sales growth, as Christophe has indicated. It will be accretive to our adjusted EBITDA margin and to our EPS growth. Importantly, with this transaction, we will generate returns which are significantly above our weighted average cost of capital. As we've discussed recently, we have ample financial flexibility to pursue this transaction. We will finance it with approximately $800 million in cash off of our balance sheet, and we'll finance the remainder with low-cost debt. Very importantly, we remain very focused on our consistent financial management principles. We are committed to returning to A-range metrics over the near term. We'll prioritize deleveraging post-close and utilizing cash flow to repay short-term debt, which will be part of the financing structure, and manage our way back toward our intended long-term target of about 2x net debt to adjusted EBITDA. We will also continue to be unchanged in our cash priorities. We view this as an absolutely terrific opportunity to take advantage of Ecolab's financial strength, our experience in the life sciences business, and to get together with a terrific partner to drive future growth at very attractive returns. With that, I'll turn it back to Christophe to summarize on slide 16, more on why we're excited about the acquisition and the long-term growth opportunity. Hey, thank you so much, Dan. Before we conclude, as you can tell, we're very excited about this acquisition, as a team and as a company and together with Purolite. At Ecolab, our future is all about high profitable growth. Purolite is a great, fast-growing company with very high margins, so that fits very well with us. It adds a new major growth opportunity to Ecolab led by pharma and biopharma, one of the largest and fastest-growing global industries. Most importantly, it allows us to create a brand-new growth platform that serves both life sciences and industrial by bringing outside quality together with inside quality like we did with water and hygiene so successfully over the years. It's a double down on our highly successful life sciences businesses and a major growth booster to our industrial segment at the same time in a way that no one else can deliver. All of that with attractive long-term financial returns for shareholders. With that, we'll open it up for your questions. Thanks. That concludes our formal remarks. Operator, please begin the question and answer period. Thank you. We will now be conducting a question and answer session. We ask that you please limit yourself to one question and one brief follow-up question per caller so that others will have a chance to participate. If you'd like to ask a question, you may press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Our first question comes from the line of Tim Mulrooney with William Blair. Please proceed with your question. Good morning, and congratulations on the transaction here. Thank you. Good morning, Tim. Christophe, you know, I know that there aren't any synergies in any of the numbers associated with this deal, but I was curious, you know, how you'd characterize the potential for any revenue synergies with this deal. There were two I wanted to ask about in particular. I mean, number one, creating more of a total solution platform in life sciences and also though, number two, maybe cross-selling to your large industrial customer lists. I'd love to hear your thoughts on either of those opportunities. Yeah, great question, Tim. It's really a growth play, which is why we don't have cost synergies as well in here, which makes everything much easier. We can really focus all our attention in fueling their growth, Purolite growth, while leveraging the combined value propositions between the two businesses. When we think back as well what we did with water the last 10 years as well, it's been an unbelievable journey where we could bring water and hygiene together to customers who were asking that for years, ultimately, and the rest is history. You've seen how much growth and profit we've generated as well with water and hygiene together. With life sciences, it's gonna be the same. We need to know more obviously, but the fact that we have just a third of overlap so between the 100 customers that we can have out there in the pharma and biopharma industry. Well, that's an obvious synergy play because two-thirds is a circle, the customer circle, the global play, which we know exactly how to do. We have a connection, we bring them in. They have a connection, they bring us in ultimately. On the other hand, as mentioned as well, we're strong in Europe, they are strong in North America, so obviously like that, so we can create geographic as well synergies on both sides of the Atlantic, which is really cool. Last but not least, as mentioned before, the fact that our current life sciences businesses are really focused on processing lines and clean rooms. The outside of the production, Purolite is focused on purifying the product itself, the vaccine, the drug, ultimately. To bring it all together, it's a one plus one equals three, which drives further growth and higher margins because it's creating incremental value. What we have in our numbers today is basically fueling the growth of Purolite, and we believe that we will have some major growth synergies that will come on top of that. Excellent. Thanks for all the detail there. I appreciate that. Just as my really quick follow-up for Dan, I was just curious what your goal was, Dan, in terms of a timeframe to get leverage back to, close to 2x. I know it's a moving target, but just looking for how you're thinking about it. I think that Dan just got disconnected, unfortunately. Oh. Tim, can we maybe keep your question and we can get back to you as soon as he is back on? Sure. Yeah. Thanks again. You're welcome. Sorry about that. Our next question comes from the line of Ashish Sabadra with RBC Capital Markets. Please proceed with your question. Thanks for taking my question, and congrats on the deal. I just wanted to focus on the industrial side. Can you also talk about how much overlap there is from a customer perspective? As we think about the smart resins, you obviously highlighted a number of applications with industrial, but are there other opportunities that you could explore just given the broad presence that you have in the industrial market? Thanks. Yeah, great question. We have a pretty high overlap in terms of customers in industrial, which is really good because we both have some connections with similar customers. What we do not have is an overlap in terms of capabilities, which is really good. When you think about microelectronics, for instance, which is a very interesting business, high growth and high margin. What we do is, again, so cleaning the processing lines to produce wafers. It's protecting the environment as well in those clean rooms. But we do not touch the water, for instance, that is cleaning the wafers in microelectronics production. Purolite, with their technology, helps us get that done. We can ultra-purify the water that's gonna clean the wafer and making sure it's polished at the right level as well. It's again, this outside that Ecolab focuses on added to the inside that Purolite focuses on that's creating so this incremental value, for microelectronics, as such. You can take another one, like in mining and especially so in high-end type of mining with, lithium, which is pretty hard, to extract. What we do, as Ecolab is to take care of, the wastewater, is to take care of the extraction, so in the mine, while Purolite is helping extracting the lithium from the brine, the water, where the mineral is. Ultimately, this is something we cannot do, today Ecolab, while Purolite does it in a very efficient way. With that technology we can extract the lithium in a way that's environmentally friendly, that's cost competitive as well, and that's creating so high value added batteries afterwards for the EV production. I can give you one example. A few weeks ago, they just closed a contract with the only mine in the U.S., which is in California, where Purolite is gonna be the partner of that mining production for lithium batteries as well. They were in competition with others, and they won as well on that. Just one example on how we can work together, yeah. That's very helpful, Christophe. Maybe just a quick follow-up, maybe on the biopharma side. As you mentioned, there are only two players there. Can you just talk about Purolite's market share and then the combination just with given your strong sales force, how should we think about that market share in the biopharma market? Thanks. What's really interesting with the market in biopharma is that there are generally two global players. It's Cytiva and Purolite. It's a billion-dollar market, especially so in the high-tech monoclonal antibodies and mRNA types of vaccines. Cytiva is number one today. Purolite is the close number two today, growing fast as well. Interestingly enough, we know that our competitor, or our future competitor, I should say, is maxed in terms of production capacity until 2023. It's on their website, so it's not exactly secret information. Purolite has available capacity because they built new capacity in the U.K. and now are adding early next year a new production plant as well in the U.S. Which will help obviously the continued growth of Purolite versus its competitor. As mentioned, the market is so big, growing so fast that there is room for two and more. Thanks, Christophe. Congrats once again on the deal. Thank you so much. I've heard that Dan has just joined us as well again. Dan, if you could maybe address the question of the leverage and when we get back to levels of 2. Yes, thank you. I apologize. I dropped there for a minute and didn't hear the question, but I understand it, Christophe, as you paraphrased it. Look, this is, as we've described it, a terrifically accretive opportunity, which will add to Ecolab's ability to generate free cash flow. Our anticipation is that we will be returning to our intended credit metric in the neighborhood of 2x debt to adjusted EBITDA by the end of 2023. It's about a two-year plan to get back to where we prefer to be. Great. Thank you, Dan. Our next question comes from the line of Chris Parkinson with Mizuho. Please proceed with your question. Great. Thank you very much. Chris, you know, while everybody's knee-jerk reaction on day one is obviously to focus on multiples and accretion, at least in our world, you hit on this in a little bit of your prepared remarks. I'd love to dive in a little bit further. Just, you know, can you get into the kind of fit and the strategic rationale specifically in life sciences? Just any color on how this specific portfolio technology augments your existing platform with everything from your service levels to client certified to Bioquell and just enables you to, you know, even more proactively compete in that industry. Anything you could share on that would be greatly appreciated. Thank you. Thank you, Chris. Four things, I would say here. The first most obvious thing is that we're adding a fast-growing, high-margin business to our company as a standalone basis, growing double-digit margins in the 40s and serving such high-growth markets, driven by high-tech like mRNA vaccines and monoclonal antibodies, which is really the new drivers in the pharma industry. The first point is really that as a company as such, well, it's a growth engine that we're acquiring. The second one is that we're creating a new growth platform. As mentioned before, this is something that we've done very successfully in the past as a company. When we acquired Nalco in 2011, we added water to hygiene. When we built Pest Elimination, well, we created a global growth platform for institutional, for food and beverage, for healthcare, and all the end markets that we have. It's kind of a platform that's serving so many end markets as well. When we acquired Nalco, we got digital technology capabilities and platforms that Nalco had, and we'd expanded it in all our industrial businesses and now starting as well in institutional. You mentioned Bioquell as well, which has been a great story, where we've leveraged that growth platform in life science, obviously in healthcare and in other public spaces as well, especially so during these crazy times of COVID. That's the second point. It's really sort of creating this global growth platform. Talking to life sciences, as mentioned earlier, it's creating this one plus one equal three incremental value, which is a pretty cool thing. Like water and hygiene is helping you produce much better, much safer food while reducing the environmental impact and reducing your total operating cost. Well, in life sciences, with both together, well, life sciences today, which is a $300 million business growing double-digit with margins in the 30s, as well, is ultimately with the same customers focusing on the processing lines, making sure that they are safe and sterilized, that we can focus as well on the clean room, the environment where it's being produced. We do not touch the product itself, the drug or the vaccine. Well, Purolite does that, making sure that the vaccine and or the drug ultimately are in perfect quality standards, are totally safe as well, so to be used in human bodies as it's where they're used to ultimately. You bring the outside together with the inside of the production, which is really creating this incremental value that no one else out there so can do, which is pretty cool. The last thing is that we can leverage that in industrial, Chris, as mentioned before, so we can help produce safer food and better food as well. You can remove so bad taste from food and beverage, for instance, as well. As mentioned, on the lithium as well in mining, which is helping us move our mining business towards high tech, high margin, fast growth type of businesses, as I mentioned with this example in California as well. Microelectronics, nuclear power and all that. A bunch of examples as such there. A great growth business added to our company, creating a growth platform for many end markets, especially in life sciences. We'll be over the next years reaching $1 billion with high margin and fast growth type of business. Pretty cool thing. Any adds to that, Chris, all the leverage that we can bring to industrial. I hope it helps a bit. That was very helpful, especially your remarks on point three. Just as a corollary of that, I mean, just given the attractive margin profile, projected growth rates, can you just quickly, you know, decompose just the ability to hold or even potentially improve the margin levels of the portfolio, just given the higher value consumables? You mentioned some in your preliminary remarks, you know, aspects of being, you know, speculative with the FDA. Just anything on the margin sustainability, you know, in the long term growth trajectory, would also be helpful. Thank you. Great. Thank you, Chris. Well, first, they're growing fast because they're serving a fast growth market. That helps. It's not always the case, obviously. Sometimes it's just a share play. Well, in that case, they're serving a high growth market, which clearly helps. Why is it growing fast? Is that these new technologies, as we've experienced, so with mRNA vaccines, so from Pfizer and Moderna, well, everybody knows it, the demand is much higher. Interestingly enough, Purolite is very small in that field right now, which is all upside, going forward as well, but pretty strong. In monoclonal antibodies, which are all the drug for cancer treatment, diabetes, arthritis and all that, this is the new pharma technology, which is growing really fast, and that's gonna be 40% of that market in the next few years as well. It's serving a fast growth market. At the same time, as mentioned, it's one of only two leading players out there. Ultimately, they are in a situation where the demand is outstripping the supply, which is obviously all driving growth and margins at the same time, which is a good segue for me to talk about the margins as mentioned. Supply versus demand, which is a positive equation for that and it's gonna be so for a long term, the case as well. It's also high margin, Chris, because it's serving mission-critical part of the production. It's really making sure that those drugs and vaccines are ultimately really safe for human consumption, which is pretty cool as well. It's also that they have a very differentiated technology. To put it in simple terms, this agarose jetting technology, which is purifying those drugs and vaccines, in the simplest way to express it, those are small beads that you can program to attract exactly what you want, really making sure that at the end of the pipe you have the exact vaccine or the exact drug that's coming out in the purity level that you're looking for as well. This is a very unique technology that we use in biopharma and can be used elsewhere as well. You've mentioned as well, so the FDA approvals, this technology is part of the FDA approval as well. It's a long-term relationship that you have for customers that helps obviously so to maintain margins as such. Last but not least, on the sustainability of growth and margins, as I mentioned before, the fact that we have limited overlap in terms of customers in life sciences is a huge growth opportunity. The fact that we're strong in North America, we're strong in Europe, while there's a natural opportunity here as well. In the end, bringing the two values, the inside, the product itself, and the outside, the environmental, clean and safe ultimately is creating this one plus one equal three, which only us will be able so to deliver. That will be driving sales and growth, in terms of margins as well in the years to come. Thank you for the color as always. Thank you, Chris. Our next question comes from the line of John McNulty with BMO Capital Markets. Please proceed with your question. Yeah, thanks for taking my question and congratulations. Just a quick one on the differences between the Life Sciences and Industrial segment. Can you speak to the differences in the margins in that particular business? I think I have a hunch in terms of how they lay out, but can you give us a little bit of clarity on that? Yeah. Good morning, John. The margins are high on both sides. Interestingly enough, if you look at the sales of Purolite today, it's kind of 60% industrial, 40% life science. If you look at the margin, it's the reverse ultimately, 60% life science and 40% industrial as such. In the life sciences market, the margins are north of 60% up to 75% for the most high tech applications, very high. When you look at the industrial market, it's closer to 45%-50%. Got it. No, that's helpful. Then maybe just a little bit of clarity on the $300 million tax benefit. I guess, how should we think about how this flows through, you know, either from an earnings or cash flow perspective as we kinda look out? Does it immediately hit? Is it something that, you know, you take advantage of over the next couple of years? I guess maybe a little bit of color on that would be helpful too. Yeah. I could cover that, but I would prefer having Dan, if he's connected, to cover that. Our CFO. Dan, are you on? Yeah, I'm here. Yes. Thank you, John. The nature of the benefit, let's start there, is that this is an asset deal. For tax purposes you get a step up in the asset base. You're right, it's recovered over time over the normal tax amortization period. The present value of that at the weighted average cost of capital is the $300 million that we referenced. Okay? Got it. Okay. [crosstalk] This is really tied to the amortization side of things. Right. In terms of the write-up. It is, it's exactly right. You get the step up, you take that into your return, and the present value of it is $300 million. It's not an immediate cash benefit, but it is clearly a cash benefit to the transaction. Got it. Thanks very much for the color. Okay. Thank you, John. Our next question comes from the line of John Roberts with UBS. Please proceed with your question. Thank you and congratulations. Thank you. Good morning, John. On slide eleven, how much of the $160 million in life science sales is agarose resin versus the more traditional synthetic ion exchange resins? It's roughly 80% jetted agarose and it's growing. It will move towards 100% over time. Wow, that's bigger than I thought because that $40 million at the start in 2017 would have all been the synthetic resins, correct? That's correct. Okay. Is Purolite asset light? You mentioned new plants in both the U.K. and the U.S. Do you have a 2021 CapEx number? I don't have the exact number, but they are in terms of capital spend very close to us. It's close to the 2%-3%, as well. It's very similar to what we do. It's capital light, if we may say. But it's a big focus for us or for them, since as mentioned before. It's a capacity constrained market. The faster you can bring capacity on the market, the faster you can grow. Interestingly enough, since competition is kind of fully booked until 2023. We have available capacity in the U.K. and the new plant in the U.S. that will add to that. Again, an equivalent of $500 million of sales capacity that we can add over the next few years. Great. Thank you. Thank you, John. Our next question comes from the line of Gary Bisbee with Bank of America Securities. Please proceed with your question. Hey, good morning and congratulations. Looks like a strong deal. I guess the 19x multiple of EBITDA on 2022 suggests fairly meaningful EBITDA growth in 2022. Sounds like you're talking about mid-teens type revenue growth, but what is it. It seems to imply margins expand quite a bit. As we think to 2022 and 2023, how are you thinking about margins trajectory here? I know you said no synergies. I guess it sounds like life sciences is higher margin and growing faster, so maybe that's the answer. Do you think these margins actually scale from these levels in the next few years, and how much? Thanks. Yeah, it's part of the answer, for sure. As mentioned before, since the life sciences margins are even higher than the industrial ones, the portfolio shift will drive higher margins, by definition. When we look at their current trajectory in terms of earnings progression, it's in the 30s+, so already that is very good. The fact that well, there's limited capacity, so it helps obviously to protect and grow the margins. But most importantly is the fact that that technology, as mentioned before, it's this agarose jetting technology, is really so focused on one specific drug that's being produced. You program those beads, if I may say, to really extract exactly what you want. Which means it's part of the development of the drug as well. Just imagine how critical that is in the end product. That means that it's helping drive the margins as well in the right direction ultimately. For the pharma companies, this is not a cost question. It's producing the best vaccine, the safest vaccine or drug, so for human and reducing any environmental impact, which is all a good story for margins. That's helpful. Thanks. You know, you talked about the market growth on slide six, but it sounds like it's growing a lot faster or that greater than 10%, maybe meaningfully faster in the biopharma category. I guess I just wanted to think about how much of the growth is because their business has capacity, has added capacity and the competitor doesn't versus sort of underlying growth rate that would support both if they both were adding capacity. Like, are you growing because you sort of got the capacity at hand now and you're gonna help them grow it faster? Or is the market really growing in that mid-teens trajectory and the capacity is not as much a consideration? Obviously, I'm not asking about the next six months. I'm asking about the next, you know, several years with that question. Yeah. Absolutely, Gary. You answered the question actually here. The market is growing faster than what the supply can produce. That's why you have kind of a disconnect in here. The more capacity you can bring on the market, the faster you can grow. That's why we're saying the market is growing, so 15%-ish. When we look at that page six there, that's why we were talking about 10, which is the supply market as such. Obviously you have one that's growing faster than the other one because there is available capacity to produce. Okay. All right. Thank you. You're welcome, Gary. Our next question comes from the line of Kevin McVeigh with Credit Suisse. Please proceed with your question. Great. Thanks so much and congratulations. Hey, Christophe, really good margins. It sounds like they've ramped up about $500 million of incremental capacity. I'd imagine that's in the expense line already. As that starts to come online, does that mean, you know, the margins scale higher, I guess? Is there any way to think about how much of that incremental capacity has impacted the margin already? Because again, really strong margins, but it feels like maybe there's some, you know, just that capacity is probably bringing it down. Actually, no, it's the other way around. Because, well, this refers to the simple equation that the more volume you have in a plant, the higher the cost absorption is. You have your cost of production going down. In very simple terms, as I said, you have that's helping on the margin side. Second is, as mentioned before, new drugs and vaccines are requiring more high tech solutions, the way I described before. With the jetted agarose beads that you can program and ultimately that's driving margins up. Keep in mind that, you know, to put in perspective, if you look at that technology in 1 gallon, it's the same gross margin as a full truck of what lower end produces worth, in resin technology. Just to keep in mind a little bit what kind of margins we're talking about for that type of technology. That's very helpful. Just real quick, the 14% growth that they've grown historically, is that all organic or is it inorganic? Because again, it looks like the market, a t least according to slide six, it seems like they're way outpacing the market. Is that kind of the pricing or just relative share shift? Any components as to the delta between the growth and market growth? It's very aligned, actually, but with the advantage of the available production capacity as mentioned before, they have the advantage of having available capacity in Europe and will have so in the second quarter of next year in the U.S., as well. That will help growth and help margins for all the reasons I mentioned before. Understood. Thank you. Thank you, Kevin. Our next question comes from the line of Shlomo Rosenbaum with Stifel. Please proceed with your question. Hi. Good morning. Thank you for taking my questions. This looks like a very interesting deal, Christophe. I want to ask a little bit, just between them and Cytiva, is there a significant difference technologically, or is it really a matter of, you know, whoever's got the best production is gonna sell the most? Is there something more to it than that, at least as of right now? Then, I just also want to know if the biopharma area, did their 40% of revenue in life sciences break down along the lines of the way that you split up the market, like, you know, percentage-wise, or are they larger in biopharma, you know, than this would imply? You know, just trying to see if they match up with the market on the revenue. Yeah. First and foremost, Cytiva is an extraordinary player. They were the first one on the market as well, and Purolite was the second, and they are the two ultimately global leading players in that market. That's the overall story. When you talk about manufacturing capacity, yes, obviously you have an advantage when you have available capacity because you just build it versus for them being kind of capped, but they're building plants as well, which is all good for everyone because there is plenty of space for two, just to be very clear here. Back to your question on the difference between the two products. Purolite has these patented jetted agarose technology, which is different than what Cytiva is doing. That has the advantage of being faster to produce. It's more cost-effective to produce as well. It's more environmentally friendly because you don't need solvents to produce it as well. It's a differentiated technology, protected technology that we believe has advantages versus what Cytiva is offering. Again, two great companies serving a market that's hungry for more anyway. Thank you. The breakdown is along the lines roughly similar to what you put out on slide six in terms of, you know, the way the market shakes out? They're mostly in life sciences. That's why. One way to look at it is that Cytiva is clearly the leader in pharma, biopharma, and Purolite is the global leader in resin-based ion exchange technology, including industrial, which Cytiva doesn't really do today. Okay. Thank you. You're welcome, Shlomo. Our next question comes from the line of Andy Wittmann with Robert W. Baird. Please proceed with your question. Excuse me. Thank you for taking my questions. I guess I just wanna address the mRNA vaccine production in 2021 and the impact on the business. You kinda touched on it briefly before, but was that a material driver to the 2021 results? No. Interestingly enough, they haven't started a significant production on mRNA vaccines, which is the COVID vaccine that you're talking about here. There's no bump related to COVID. It's kind of, I see that as a good news, Andy, because that's all upside going forward. Unfortunately, we know that we're gonna stay on boosters and new vaccines, so on an annual basis as well. It's a good market. It's a new market. It's a fast-growing market. Purolite is getting into the vaccine piece. They were much more focused on the drug part, which is not COVID related so far. Okay. That's helpful. Then I guess, just because this is, this is kind of a new market for you guys, and you did mention, I think, in your materials here that you're gonna run it as a standalone business. I was just wondering about, given that this appears to have been, at least a largely family-owned company, how much of the management team is going to, come over and stay on after the buyout? It's a great question, and I'll give you the general picture thereof personal considerations, obviously. Purolite has a very strong management team, very entrepreneurial, very sales-driven, very customer-focused, very well working together, and you see it in the results, obviously, and very innovation-driven, as you can see, as well. The two owners. The CEO is 81 and the CTO is 76. There's a limited runway. Obviously, they're gonna stay with us as long as it makes sense for both of us, and that business is gonna be run by our current General Manager in Life Sciences. It's gonna be a very good combination of Ecolab's leadership together with a very strong Purolite leadership as well at the same time. I feel really good with where we are and where we're going. Thank you. Thank you, Andy. Our next question comes from the line of Jeff Zekauskas from JP Morgan. Please proceed with your question. Thanks very much. How will you integrate the business into Ecolab? Will a piece of it go into water treatment and a piece of it into healthcare, or will you do something else with it? Good morning, Jeff. It's gonna be very easy, and you probably remember that I led the integration of Nalco and Ecolab a few years ago, which was a real integration. In that case, I would put it in black and white. There is no integration. It's a standalone operating company based out of Philadelphia, which is the hotbed of pharma and biopharma, as you know as well. It's all about growth. It's all about fueling their own project while we build all the commercial connections with life sciences and industrial, which I think is really cool for us, Jeff, because there is no distraction, no integration risk. If you wanna take an example of what we've done in the past, you know our Kay business that's serving the QSR, the McDonald's and Walmarts of that world. We acquired them, I don't know, 20+ years ago. We've kept them operating independently out of North Carolina very successfully, and they work together with our pest team, with our water team, with our EcoSure team in a very smart way. It's gonna be the same with Purolite. Great. I just wanna follow up and then ask my second question. Yeah. In other words, part of the revenues will go into water, and part of the revenues will go into healthcare. Is that what will happen to the company? No, it's not what will happen. It's a life sciences company serving many end markets. Oh. It's gonna be reported within life sciences. It's a life sciences company today, and it's gonna be a life sciences company tomorrow. You're gonna see it's so combined with other life sciences reporting. Right. For my second question, is it a chemistry company rather than a materials company? In other words, is its technology chemistry or is it, you know, polypropylene membranes or nylon membranes? What's the thing that it's got that differentiates it? There's no membranes, no filters. This is not at all that technology. It's resins. It's very small beads that are the diameter of a hair. It's very small, obviously, as such. Those small beads are programmed without going into tech, ultimately here, to attract the exact molecule that you want to extract, like lithium in a brine. Yep. For instance, before or anything that might be in the vaccine production that you don't wanna see in the human body, then afterwards. It's a very different technology than anything that you've mentioned, like filtration or RO or membranes. Nothing to do with that. Okay, great. Thank you so much. You're welcome. Our next question comes from the line of Mike Harrison with Seaport Research Partners. Please proceed with your question. Hi, good morning. Good morning. I'm particularly intrigued, and we haven't really talked about it yet, about the food and beverage opportunity here. Clearly, this separation technology around ultrapure water is something you can leverage for your food and beverage customers. Wondering if there's also a potential purification opportunity for some of your restaurant customers, where they're serving soft drinks that could benefit from water purification. Yeah. Ultimately, yes, but that's really so down the road. The institutional piece. Just keeping in mind, that type of technology is kind of $15,000 a liter. It's not exactly aligned with restaurants for now. It's definitely a technology you can dumb down for institutional. When we talk about the beverage filtration to make sure that your Coke or Pepsi that you're drinking has the right flavor, we have that application already now, which is much cheaper and working very well with our programs. Now back to F&B. Mike, interestingly enough, you can see it in two different key applications. On one hand, it's purifying the water that might be used as an ingredient in food and beverage. Think about PFAS, which is a big topic and unfortunately a topic that's getting much bigger going forward, where you can purify that water before it gets into the product. That's one plus. The second is that, as mentioned before, you can program those beads in order to capture exactly what you want, which means that in food and beverage, you can extract an off flavor, for instance, that you might have in a drink, in wine, in orange juice, by purifying that product, by selecting exactly what you wanna take out, and that's the way they're operating in food and beverage. All right. A quick question for Dan. Any thoughts on what the interest rate could look like for the debt that you're taking on? Yeah, sure. So just maybe by way of background, like, given what I've said that our intent is to pay down the debt, and get back to our intended leverage metric as soon as we can, so looking at two years, a lot of this will be quite short term. The short answer to your question is about 2%. The curve is pretty flat now currently, but it's a great time to be a borrower for a great transaction. Sounds good. Thank you very much. Thank you, Mike. Our next question comes from the line of Rosemarie Morbelli with Gabelli & Company. Please proceed with your question. Thank you. [Non-English content]. [Non-English content], Rosemarie. Given the fact that this is a very high growth and especially high margin business, what is the likelihood of new entrants? I mean, I realize that it is difficult to get into this particular business, but there are some technology companies, particularly in the pharma industry, who could come up with what is needed. Do you have any thoughts on that? Yeah, it's a great question. [Non-English content], Rosemarie. A few things. First, it took Purolite seven years to develop the agarose jetting technology. It is really hard to develop that technology. It's not an easy one. There's maybe a way to gain a year or two, but since it's a very fast-growing market, it's hard to catch up, obviously, as such. Long development time. At the same time, it's a patented technology. Cytiva technology is patented. Purolite's jetting technology is patented as well. The third thing, Rosemarie, is that it's part of the FDA approvals as well, so it's really hard to switch then afterwards because you wanna make sure you're not taking any risk, obviously, so with human safety, ultimately. Last but not least, you need to have the production capacity, as well, to do it. This is something which takes time to get right, as well. Will be new entrants going forward since that market is so big and growing so fast, but it's darn hard to do the same. Okay, thanks. I missed the addition in CapEx. I understand that the additional capacity is going to open the potential for $500 million in revenues. What is the dollar amount of CapEx that you will be needed on an annualized basis? Rosemarie, it's very similar to Ecolab, so what you've seen over the years. It's between 2% and 3% of sales. It's very similar. Same question regarding R&D. How high is the R&D investment? It's a bit higher than ours in percentage of sales, which is similar for us. Overall, as a company, it's not gonna move the needle much versus our overall sales for Ecolab. Okay. [Non-English content]. [Non-English content] weekend. Our next question comes from the line of Eric Petrie with Citi. Please proceed with your question. Hi. Good morning, Christophe. Thanks for squeezing me in. A question on the 14% top line growth. How much of that is split between volume and price? Good morning, Eric. I'm not totally sure on this one, but I think pricing is a few percentage points and the balance is volume. Okay. That's what I thought. A quick follow-up question. How large is the protein A resin market? You know, what capacity does Purolite have? How long does it take to build new capacity? The overall market today, and it's a growing proposition as mentioned before, so is roughly $1 billion. It's what's expected today. By 2024, it's expected to be $1.6 billion. You see how fast that market is growing, the specific market you just mentioned, Eric, as such. To build one of those plants, when you know how to build them, which is an important one, it takes roughly a year. Okay. How much does that translate, $1 billion into liters, in terms of market size? It is a great question, Eric. I have absolutely no idea. What's important to keep in mind, it's roughly $15,000 per liter. I guess, we could do the math. Perfect. Thanks. You're welcome, Eric. There are no further questions in the queue. I'd like to hand the call back to management for closing remarks. Thank you. That wraps up our conference call. This conference call and associated press release and slides will be available for replay on our website. Thank you for your time and participation, and best wishes for the rest of the day. Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.