On Tuesday, Praxair (NYSE:LIN) announced that it has signed an agreement to buy beverage carbonator NuCO2 Inc. from private equity firm Aurora Capital Group for $1.1 billion in cash.

With $250 million in projected sales for 2013, NuCO2 is selling for approximately 4.4 times annual sales, a sizable premium to the 2.9 times sales valuation of Praxair's own shares. On the other hand, NuCO2's $115 million in annual earnings before interest, taxes, depreciation, and amortization shows the companies' price-to-EBITDA valuations are much more comparable. Praxair commands a 9.3 P/EBITDA ratio, versus the 9.6 ratio it's paying for NuCO2.

Praxair appears to think the premiums are worth paying, however, in order to gain control of NuCO2's "leading" position in the market for "micro-bulk carbonation" of beverages for quick-service restaurants, convenience stores, and craft beer vendors. The deal is expected to close by the end of this quarter. NuCO2 has 162,000 customer locations and 900 employees.

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