Philadelphia-based Axalta Coating Systems, the paints-and-powders company spun off by DuPont Co., says it has agreed to pay $420 million in cash to paintmakers Valspar Corp. and Sherwin-Williams Co. to acquire Valspar's North American Industrial Wood Coatings unit.
The business is being spun off so Sherwin-Williams, the Cleveland company that owns Philadelphia's former M.A. Bruder paints, can get approval from U.S. and Canadian regulators,to buy Valspar, based in Minneapolis.
The global industrial-coatings business is consolidating, with PPG Industries of Pittsburgh considering a deal with Netherlands-based AkzoNobel NV. Axalta has been a potential AkzoNobel acquisition target "for years," Bloomberg reported here. See also this 2014 story about a purported $7 billion AkzoNobel offer for Axalta.
The unit Axalta plans to buy develops, produces and sells wood coatings under the Valspar Wood, Zenith, Lustre Lac and Grainstone labels for lumber suppliers and cabinet, flooring and furniture makers in the United States and Canada. Sales totalled around $225 million last year.
In a statement, Axalta chief executive Charles Shaver called the deal "an outstanding opportunity" that would "strengthen and further diversify our Performance Coatings segment.”
Centerview Partners LLC advised Axalta. Deutsche Bank AG's New York office will help finance the deal.