PPG completes sale of architectural coatings U.S. and Canada business to American Industrial Partners
PPG (NYSE:PPG) today announced that it has completed the sale of 100% of its architectural coatings business in the U.S. and Canada at a transaction value of $550 million to American Industrial Partners (AIP), an industrials investor.
PPG's architectural coatings businesses in other regions around the world remain core businesses within the company's portfolio, including in Latin America, Europe and Asia Pacific, where PPG holds strong #1 or #2 positions in a number of key countries.
"We are pleased to complete this transaction with American Industrial Partners, and I want to thank the architectural coatings U.S. and Canada employees for their dedication and commitment to the business and to PPG customers throughout the years," said Tim Knavish, PPG chairman and chief executive officer. "This transaction, along with the completed sale of our silicas products business, further optimizes our portfolio by improving our organic growth and financial return profiles and will result in increased capability to channel our growth resources to areas where we have the strongest right to win with our customers."
The architectural coatings business in the U.S. and Canada represented approximately $2 billion of PPG's 2023 total net sales, with low-single-digit EBITDA margin. As previously stated, on a 3-year pro forma basis PPG's overall company sales volume results would have improved cumulatively by over 200 basis points excluding this business. Also, the company's Performance Coatings segment operating (EBIT) income, excluding the U.S. and Canada architectural coatings EBIT and the associated growth-related investments we have made, would have resulted in an approximately 300-basis point improvement in segment margins in 2023.
The transaction is the result of PPG's evaluation of strategic alternatives for the business, which was first announced on February 26, 2024. Goldman Sachs & Co. LLC acted as PPG's exclusive financial advisor and Hogan Lovells U.S. LLP served as its legal advisor.
About PPG's former architectural business in the U.S. and Canada:
PPG's former architectural coatings business in the U.S. and Canada is an industry leader in residential and commercial architectural coatings through its well-known portfolio of brands, including GLIDDEN®, OLYMPIC®, LIQUID NAILS®, HOMAX®, PITTSBURGH PAINTS & STAINS®, Manor Hall®, FLOOD®, DULUX® (in Canada), and SICO®, among others. The business manufactures and sells interior and exterior paints, stains, caulks, repair products, adhesives, and sealants for homeowners and professionals. It also includes certain light-duty protective coatings products that are primarily sold through company-owned stores and manufactured through a common factory footprint.
The transaction included the following Architectural Coatings facilities:
- Manufacturing: East Point, Georgia; Oakwood, Georgia; Louisville, Kentucky; Huron, Ohio; Reno, Nevada; Carrollton, Texas; Temple, Texas; Delta, British Columbia (Canada); and Vaughan, Ontario (Canada).
- Distribution Centers: Huron, Ohio; Oakwood, Georgia; Reno, Nevada; Aurora, Illinois; Flower Mound, Texas; Riverside, California; Reading, Pennsylvania; Carolina, Puerto Rico; Calgary, Alberta (Canada); Delta, British Columbia (Canada); Toronto, Ontario (Canada); and Moncton, New Brunswick (Canada).
- More than 15,000 points of sale, including 750 company-owned stores, 6,600 independent dealer locations, and 8,100 major home improvement centers and retailer locations across the U.S., Canada and Puerto Rico.
- Leased headquarter offices for leadership and administrative teams located in Cranberry, Pennsylvania; Vaughan, Ontario (Canada) and Boucherville, Quebec (Canada)
About American Industrial Partners:
American Industrial Partners ("AIP") is an industrials investor, with approximately $16 billion in assets under management. AIP is distinctively focused on industrial businesses across a broad range of end markets that include: aerospace and defense, automotive, building products, capital goods, chemicals, industrial services, industrial technology, logistics, metals & mining, and transportation, among others. AIP looks to generate differentiated returns by investing in quality industrial businesses with strong management teams and working with those teams to implement comprehensive operating agendas to build long-term value. Current AIP portfolio companies generate aggregate annual revenues of approximately $25 billion and employ approximately 70,000 employees as of June 30, 2024. www.americanindustrial.com
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