At the beginning of the month, PPG announced that it has completed the sale of 100% of its architectural coatings business in the United States and Canada to industrials investor American Industrial Partners.
The transaction, valued at $550 million, will see the renaming of the business to The Pittsburgh Paints Company. The name is an homage to when the original company began marketing paints designed to be durable and visually appealing in 1897. Pittsburgh Paints Co. will also reportedly serve as the exclusive distributor for PPG’s Protective and Marine Coatings business in the region.
“Now a newly independent company, we call on Pittsburgh Paints Co.’s 125-year legacy of innovation and product excellence as we chart an aggressive course of transformation and renewal within this extraordinary industry,” said Rick Hoffman, Partner at AIP. “Pittsburgh Paints Co.’s broad foundation, respected brand portfolio, and experienced team are primed for growth, and we are proud to be their partners.”
“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.”
Previously operating in PPG’s Performance Coatings segment, the U.S. and Canada business includes a portfolio of brands such as Glidden, Olympic, Liquid Nails, Homax, Pittsburgh Paints and Stains, Manor Hall, Flood, Dulux (Canada) and Sico, among others.
The sale was a result of PPG’s evaluation of strategic alternatives for the business, first revealed in February this year. A definitive agreement to sell the business was then reached with American Industrial Partners in October. The architectural coatings business in the U.S. and Canada reportedly represented about $2 billion of total 2023 net sales, with low-single-digit EBITDA margin. On a three-year pro forma basis, PPG’s overall company sales volume results would have improved cumulatively by over 200 basis points excluding this business.
Additionally, the company’s Performance Coatings segment operating (EBIT) income, excluding the U.S. and Canada architectural coatings EBIT and the associated growth-related investments made, would have resulted in an approximately 300-basis point improvement in segment margins in 2023.
According to PPG, its architectural coatings businesses in other regions of the world, including Latin America, Europe and Asia Pacific, remain “core businesses” within PPG’s portfolio.
The transaction includes 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; and
-Leased headquarter offices for leadership and administrative teams located in Cranberry, Pennsylvania; Vaughan, Ontario (Canada) and Boucherville, Quebec (Canada).
“AIP is the ideal partner to support our growth objectives and to build upon the exceptional customer service that is the foundation of our business,” said Jaime Irick, Chief Executive Officer of Pittsburgh Paints Co. “Our entire organization is excited about the opportunity ahead as we build a faster, more focused, and stronger company.”
