PPG Completes Sale of Architectural Coatings Business to American Industrial Partners for $550 Million.

PPG completes sale of architectural coatings business in the US and Canada to American Industrial Partners for $550 million. The business, valued at $2 billion, had a low-single-digit EBITDA margin. The transaction optimizes PPG's portfolio and improves its growth and financial return profiles. PPG's architectural coatings businesses in other regions remain core businesses within the company's portfolio.

In a strategic move to enhance its growth and financial return profiles, PPG (NYSE: PPG) has announced the sale of its architectural coatings business in the US and Canada to American Industrial Partners (AIP) for a transaction value of $550 million [1]. The divestiture, which is expected to close in late 2024 or early 2025, follows PPG's evaluation of strategic alternatives for the business, first announced on February 26, 2024.

The architectural coatings business, valued at approximately $2 billion, had a low-single-digit EBITDA margin. With the sale, PPG aims to optimize its portfolio and focus on its core businesses [1]. The company's architectural coatings businesses in other regions remain part of its portfolio.

In conjunction with the sale, PPG also announced a comprehensive cost reduction program, aimed at reducing structural costs primarily in Europe and certain other global businesses. The program includes facility closures, targeted fixed costs, and pre-tax charges of approximately $250 million in the fourth quarter of 2024 [1]. The company anticipates annualized pre-tax savings of approximately $175 million once fully implemented, with savings of $60 million in 2025.

Goldman Sachs & Co. LLC acted as PPG's exclusive financial advisor, and Hogan Lovells U.S. LLP served as its legal advisor in the transaction [1]. The sale is expected to impact approximately 1,800 positions, primarily in Europe and the US [1].

PPG's Chairman and CEO, Tim Knavish, expressed his satisfaction with the agreement, stating, "We are pleased to reach an agreement with American Industrial Partners and believe the business is well positioned to leverage its current positive momentum, leading brands, proven innovation, established customers, and dedicated and talented employees" [1].

References:
[1] PPG reaches agreement to sell architectural coatings U.S. and Canada business to American Industrial Partners; announces comprehensive cost reduction program. (2024, October 17). Retrieved from https://news.ppg.com/press-releases/press-release-details/2024/PPG-reaches-agreement-to-sell-architectural-coatings-U.S.-and-Canada-business-to-American-Industrial-Partners-announces-comprehensive-cost-reduction-program/default.aspx