PPG Industries (NYSE:PPG) today announced that it had completed
the acquisition of SigmaKalon Group, a worldwide coatings producer
based in Uithoorn, Netherlands, from global private investment firm
Bain Capital. The total transaction value, including assumed debt, was
approximately EUR 2.2 billion (US$3.2 billion). The company expects to
add approximately $3 billion in sales annually as a result of the
acquisition.
"This acquisition is strongly aligned with our vision and core
strategies," said Charles E. Bunch, chairman and chief executive
officer of PPG. "With SigmaKalon, we are accelerating our
transformation to focus on coatings and specialty products."
Bunch noted that almost three-quarters of the company´s sales from
continuing operations will now come from coatings, and over 80 percent
will come from its coatings, optical and specialty products
businesses.
"SigmaKalon is a very complementary fit for us," Bunch said. "The
acquisition will greatly expand our geographic footprint, extend our
market presence in various end-use markets, and sharply increase the
proportion of sales coming from architectural or decorative coatings."
SigmaKalon produces architectural, protective, marine and
industrial coatings. The company operates 22 major manufacturing
facilities across Europe and other key markets across the world. It
sells architectural coatings directly to professional painters via a
network of service centers, approximately 500 company-owned stores and
approximately 3,000 independent wholesalers that give it direct access
to customers.
Bunch added that the SigmaKalon acquisition gives PPG a strong
platform for profitable growth from which it can continue to generate
earnings and increase shareholder value.
"The acquisition will allow us to capitalize on raw materials
procurement and new, additional technologies," he said. "And although
the acquisition will be dilutive to PPG´s earnings in 2008, our goal
remains for the acquisition to be accretive to ongoing earnings per
share, including all required accounting adjustments, no later than 12
months from now."
Michael McGarry, vice president, coatings, and managing director,
PPG Europe, said, "PPG has a strong history of effective integration
of acquisitions. An efficient integration process will be critical to
our reaching the aggressive goals we´ve set for the business." McGarry
added, "As we move through the integration process, we remain
committed to ensuring that customers continue to receive excellent
performance in quality products and services."
About PPG
Pittsburgh-based PPG is a global supplier of paints, coatings,
chemicals, optical products, specialty materials, glass and fiber
glass. The company employs more than 34,000 people and has 125
manufacturing facilities and equity affiliates in more than 25
countries. PPG shares are traded on the New York Stock Exchange
(symbol: PPG). For more information, visit www.ppg.com.
Forward-Looking Statements
Statements in this news release relating to matters that are not
historical facts are forward-looking statements reflecting the
company´s current view with respect to future events or objectives and
financial or operational performance or results. This includes
financial projections with respect to SigmaKalon´s future operating
performance and the impact of such performance on PPG´s earnings,
which projections have been made based on PPG´s review of limited
financial data and other information provided to PPG in its due
diligence review of SigmaKalon. The projections disclosed herein are
estimates only; actual results may differ depending on assumptions
made and future events that involve risks and uncertainties that may
affect SigmaKalon´s and PPG´s operations. Such factors include PPG´s
ability to successfully integrate SigmaKalon into its business model
to achieve estimated synergies. Additional factors involve risks and
uncertainties as discussed in PPG Industries´ periodic reports on Form
10-K and Form 10-Q, and its current reports on Form 8-K, filed with
the Securities and Exchange Commission. Accordingly, many factors
could cause actual results to differ materially from the company´s
forward-looking statements.
Among these factors are increasing price and product competition
by foreign and domestic competitors, fluctuations in cost and
availability of raw materials and energy, the ability to maintain
favorable supplier relationships and arrangements, economic and
political conditions in international markets, foreign exchange rates
and fluctuations in such rates, the impact of environmental
regulations, unexpected business disruptions and the unpredictability
of possible future litigation, including litigation that could result
if the asbestos settlement discussed in PPG´s filings with the SEC
does not become effective. However, it is not possible to predict or
identify all such factors. Consequently, while the list of factors
presented here is considered representative, no such list should be
considered to be a complete statement of all potential risks and
uncertainties. Unlisted factors may present significant additional
obstacles to the realization of forward-looking statements.
Consequences of material differences in results as compared with
those anticipated in the forward-looking statements could include,
among other things, business disruption, operational problems,
financial loss, legal liability to third parties and similar risks,
any of which could have a material adverse effect on PPG´s
consolidated financial condition, operations or liquidity.
