Axalta has agreed to acquire Valspar’s wood coatings business to Axalta for $420 million in a move to strengthen its industrial coatings business.
Valspar is divesting the business in connection with reviews by the US Federal Trade Commission (FTC) and Canadian Competition Bureau (CCB) of Sherwin-Williams’ proposed acquisition of Valspar. Valspar’s North America industrial wood coatings activities had revenue of about $225 million in 2016.
Axalta intends to operate this business as a pure bolt-on. The Valspar wood coatings assets would grow Axalta’s industrial coatings revenue by roughly 30%. Industrial coatings accounted 18% of Axalta’s 2016 sales or roughly $720 million. Axalta’s existing industrial coatings business includes general industrial coatings, electrical insulation, exterior powder coatings for architectural applications, oil and gas, and coil coatings.
Automotive and transportation coatings, including refinish, OEM, and commercial, accounted for 82% of Axalta $4.1 billion in 2016 revenues.
Selling the industrial wood coatings business to Axalta is subject to Sherwin-Williams closing the deal to buy Valspar, as well as customary closing conditions and regulatory approvals, including from FTC and CCB. Sherwin-Williams and Valspar announced in March the extension of their merger agreement to 21 June 2017. The extension is intended to provide sufficient time to complete any required divestments. Sherwin-Williams’ acquisition of Valspar was originally announced in March 2016. “With this agreement, we believe that we have addressed regulatory concerns appropriately and we are moving forward to obtain approval for our acquisition of Valspar,” says John Morikis, chairman and CEO of Sherwin-Williams.
Sherwin-Williams announced at its first-quarter results in January that a divestiture would be required to to complete the Valspar deal. The deal contains a provision wherein if required divestitures exceed $650 million in revenue the price paid for Valspar would be reduced. Sherwin-Williams said at the time that the divestiture would be below that threshhold.
Axalta has secured a financing commitment from Deutsche Bank. Centerview Partners acted as financial advisor to Axalta. JP Morgan acted as financial advisor to Sherwin-Williams.
By Francinia Protti-Alvarez
Source: Chemical Week
INEOS, Europe’s biggest operator of electrolysis needed to produce clean, low carbon hydrogen, has doubled down on its €2 billion investment in green hydrogen with the launch of a hydrogen advocacy campaign. The campaign kicked off with the publication of a powerful editorial in the Sunday Telegraph on the hydrogen economy written by Sir Jim Ratcliffe, INEOS’s founder and chairman.
Vertellus, a manufacturer of specialty products for consumer goods, food & agriculture, healthcare, and industrial markets, today announced the completion of its acquisition of IM Chemicals. With the addition of IM Chemicals, Vertellus expands its specialty ingredients portfolio into new markets and bolsters its manufacturing capabilities in Europe.
A new collaboration between scientists, engineers, industry and farming experts hopes to demonstrate how clever technology can reduce the powerful greenhouse gases released by livestock to help agriculture reach carbon emissions targets.