Leading global supplier of liquid and powder coatings Axalta Coating Systems announced that it will acquire The Valspar Corporation, and that a definitive agreement has been reached. The Sherwin-Williams Company will take over the assets related to Valspar’s North American Industrial Wood Coatings business for US$420 million instead.
Valspar is unloading the business against the backdrop of mounting concerns from the Canadian Competition Bureau (CCB) and the Federal Trade Commission (FTC) over The Sherwin-Williams proposal for acquiring Valspar.
In 2016, Valspar recorded revenues estimated at US$225 million and is considered one of the leading providers of original equipment manufacturers (OEM) and aftermarket Industrial Wood markets, including building products, cabinets, flooring, and furniture in North America. Widely known as Valspar Wood in the industry today, the organisation holds on to numerous respected brands, including Zenith™ and Graintone™, among others. These products are brands are supported by strong research and development (R&D) and a customer service of a high quality.
“This is an outstanding opportunity for Axalta to enter the large Industrial Wood Coatings market with an industry-leading portfolio of products and services,” Chairman and CEO of Axalta, Charlie Shaver, said. “The strong reputation enjoyed by these brands among a long-term customer base will provide an excellent platform for future growth in this important market. Our shared commitment to technology and excellence in application services, as well as a strong pipeline of new products, will enable us to meet the needs of both current and new customers. This acquisition continues to build on our strategy to strengthen and further diversify our Performance Coatings segment.”
Axalta is moving on with the deal with the intention of operating the business as an utter bolt-on. As the transaction stipulates, Axalta will take over the personnel, both of Valspar’s sites dedicated purely to manufacturing, R&D assets, and the intellectual property (IP) essential to Valspar’s North American Industrial Wood Coatings business. The transaction is dependent on the finalisation of the Valspar and Sherwin-Williams merger, as well as the usual closing conditions and regulatory approvals, including the approvals from the CCB and FTC.
Thus far, Axalta has engaged Deutsche Bank AG New York Branch and secured a financial commitment for the transaction. Centerview Partners LLC also acted as Axalta’s financial advisor.