The total transaction value, including assumed debt, was approximately €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.”