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PPG completes sale of architectural coatings U.S. and Canada business to American Industrial Partners

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PPG has completed the sale of its architectural coatings business in the U.S. and Canada to American Industrial Partners (AIP) for $550 million. The sold business represented approximately $2 billion of PPG's 2023 total net sales, with low-single-digit EBITDA margin. PPG's architectural coatings operations in other regions, including Latin America, Europe, and Asia Pacific, remain core businesses. The divestment is expected to improve PPG's organic growth and financial return profiles, with a projected 300-basis point improvement in Performance Coatings segment margins in 2023.

PPG ha completato la vendita della sua attività di rivestimenti architettonici negli Stati Uniti e in Canada a American Industrial Partners (AIP) per 550 milioni di dollari. L'attività venduta rappresentava circa 2 miliardi di dollari delle vendite nette totali di PPG nel 2023, con un margine EBITDA a bassa cifra singola. Le operazioni di rivestimenti architettonici di PPG in altre regioni, inclusi America Latina, Europa e Asia Pacifico, rimangono attività principali. Si prevede che questa dismissione migliori la crescita organica e i profili di rendimento finanziario di PPG, con un miglioramento previsto di 300 punti base nei margini del segmento Performance Coatings nel 2023.

PPG ha completado la venta de su negocio de recubrimientos arquitectónicos en EE.UU. y Canadá a American Industrial Partners (AIP) por 550 millones de dólares. El negocio vendido representaba aproximadamente 2 mil millones de dólares de las ventas netas totales de PPG en 2023, con un margen EBITDA de un solo dígito bajo. Las operaciones de recubrimientos arquitectónicos de PPG en otras regiones, incluidas América Latina, Europa y Asia-Pacífico, siguen siendo negocios centrales. Se espera que esta desinversión mejore el crecimiento orgánico de PPG y los perfiles de rendimiento financiero, con una mejora proyectada de 300 puntos base en los márgenes del segmento Performance Coatings en 2023.

PPG는 미국과 캐나다의 건축용 코팅 사업을 American Industrial Partners (AIP)에 5억 5천만 달러에 판매 완료했습니다. 판매된 사업은 PPG의 2023년 총 순매출의 약 20억 달러를 차지했으며, 저조한 단일 EBITDA 마진을 기록했습니다. PPG의 라틴 아메리카, 유럽 및 아태 지역의 건축용 코팅 사업은 여전히 핵심 사업으로 남아 있습니다. 이번 매각은 PPG의 유기적 성장과 재무 수익성 향상에 기여할 것으로 예상되며, 2023년 성능 코팅 부문 마진에서 300 베이시스 포인트 개선이 예상됩니다.

PPG a finalisé la vente de son activité de revêtements architecturaux aux États-Unis et au Canada à American Industrial Partners (AIP) pour 550 millions de dollars. L'activité vendue représentait environ 2 milliards de dollars des ventes nettes totales de PPG en 2023, avec une marge EBITDA à un faible chiffre. Les opérations de revêtements architecturaux de PPG dans d'autres régions, y compris l'Amérique Latine, l'Europe et la zone Asie-Pacifique, demeurent des activités de base. Cette cession devrait améliorer la croissance organique et les profils de retour financier de PPG, avec une amélioration prévue de 300 points de base dans les marges du segment Performance Coatings en 2023.

PPG hat den Verkauf seines Geschäftsfeldes Architektur-Beschichtungen in den USA und Kanada an American Industrial Partners (AIP) für 550 Millionen Dollar abgeschlossen. Das verkaufte Geschäft machte etwa 2 Milliarden Dollar des gesamten Nettoumsatzes von PPG im Jahr 2023 aus, mit einer EBITDA-Marge im niedrigen einstelligen Bereich. Die Architektur-Beschichtungen von PPG in anderen Regionen, einschließlich Lateinamerika, Europa und Asien-Pazifik, bleiben Kernbereiche. Man erwartet, dass diese Veräußerung das organische Wachstum und die finanziellen Renditen von PPG verbessert, mit einer projizierten Verbesserung von 300 Basispunkten in den Margen des Segmentes Performance Coatings im Jahr 2023.

Positive
  • Transaction value of $550 million improves company's financial position
  • Expected 300-basis point improvement in Performance Coatings segment margins
  • Portfolio optimization to enhance organic growth profile
  • Retention of stronger-performing architectural coatings businesses in other regions
Negative
  • Divestment of $2 billion revenue business segment
  • Loss of market presence in U.S. and Canada architectural coatings sector
  • Low single-digit EBITDA margin in divested business indicates underperformance

Insights

The $550 million sale of PPG's U.S. and Canada architectural coatings business represents a strategic portfolio optimization with significant financial implications. The divested unit generated approximately $2 billion in 2023 sales but operated at low-single-digit EBITDA margins, indicating underperformance relative to PPG's core operations.

The transaction will enhance PPG's financial profile, with projected improvements including a 200 basis point boost to overall sales volume and a 300 basis point increase in Performance Coatings segment margins. This divestiture allows PPG to reallocate capital toward higher-margin opportunities while maintaining strong market positions in more profitable regions like Latin America, Europe and Asia Pacific.

This strategic exit from the lower-margin U.S. and Canada architectural coatings market demonstrates PPG's commitment to portfolio optimization. The sale to American Industrial Partners (AIP) allows PPG to focus on markets where it holds dominant #1 or #2 positions with better growth prospects. The decision to retain architectural coating operations in other global regions, particularly in high-growth markets, suggests a calculated approach to market positioning and resource allocation.

PITTSBURGH--(BUSINESS WIRE)-- PPG (NYSE: PPG) today announced that it has completed the sale of 100% of its architectural coatings business in the U.S. and Canada at a transaction value of $550 million to American Industrial Partners (AIP), an industrials investor.

PPG’s architectural coatings businesses in other regions around the world remain core businesses within the company’s portfolio, including in Latin America, Europe and Asia Pacific, where PPG holds strong #1 or #2 positions in a number of key countries.

“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.”

The architectural coatings business in the U.S. and Canada represented approximately $2 billion of PPG’s 2023 total net sales, with low-single-digit EBITDA margin. As previously stated, on a 3-year pro forma basis PPG’s overall company sales volume results would have improved cumulatively by over 200 basis points excluding this business. Also, the company’s Performance Coatings segment operating (EBIT) income, excluding the U.S. and Canada architectural coatings EBIT and the associated growth-related investments we have made, would have resulted in an approximately 300-basis point improvement in segment margins in 2023.

The transaction is the result of PPG’s evaluation of strategic alternatives for the business, which was first announced on February 26, 2024. Goldman Sachs & Co. LLC acted as PPG’s exclusive financial advisor and Hogan Lovells U.S. LLP served as its legal advisor.

About PPG’s former architectural business in the U.S. and Canada:

PPG’s former architectural coatings business in the U.S. and Canada is an industry leader in residential and commercial architectural coatings through its well-known portfolio of brands, including GLIDDEN®, OLYMPIC®, LIQUID NAILS®, HOMAX®, PITTSBURGH PAINTS & STAINS®, Manor Hall®, FLOOD®, DULUX® (in Canada), and SICO®, among others. The business manufactures and sells interior and exterior paints, stains, caulks, repair products, adhesives, and sealants for homeowners and professionals. It also includes certain light-duty protective coatings products that are primarily sold through company-owned stores and manufactured through a common factory footprint.

The transaction included 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.
  • Leased headquarter offices for leadership and administrative teams located in Cranberry, Pennsylvania; Vaughan, Ontario (Canada) and Boucherville, Quebec (Canada)

About American Industrial Partners:

American Industrial Partners (“AIP”) is an industrials investor, with approximately $16 billion in assets under management. AIP is distinctively focused on industrial businesses across a broad range of end markets that include: aerospace and defense, automotive, building products, capital goods, chemicals, industrial services, industrial technology, logistics, metals & mining, and transportation, among others. AIP looks to generate differentiated returns by investing in quality industrial businesses with strong management teams and working with those teams to implement comprehensive operating agendas to build long-term value. Current AIP portfolio companies generate aggregate annual revenues of approximately $25 billion and employ approximately 70,000 employees as of June 30, 2024. www.americanindustrial.com

PPG: WE PROTECT AND BEAUTIFY THE WORLD®

At PPG (NYSE:PPG), we work every day to develop and deliver the paints, coatings and specialty materials that our customers have trusted for more than 140 years. Through dedication and creativity, we solve our customers’ biggest challenges, collaborating closely to find the right path forward. With headquarters in Pittsburgh, we operate and innovate in more than 70 countries and reported net sales of $18.2 billion in 2023. We serve customers in construction, consumer products, industrial and transportation markets and aftermarkets. To learn more, visit www.ppg.com.

The PPG Logo, We protect and beautify the world are registered trademarks of PPG Industries Ohio, Inc.

CATEGORY Corporate

PG Media Contact:

Mark Silvey

Corporate Communications

+1-412-434-3046

silvey@ppg.com

PPG Investor Contact:

Alex Lopez

Investor Relations

+1-412-434-3466

alejandrolopez@ppg.com

investor.ppg.com

Source: PPG

FAQ

How much did PPG sell its U.S. and Canada architectural coatings business for?

PPG sold its U.S. and Canada architectural coatings business to American Industrial Partners for $550 million.

What was the annual revenue of PPG's sold architectural coatings business?

The sold architectural coatings business in the U.S. and Canada represented approximately $2 billion of PPG's 2023 total net sales.

Which regions does PPG still maintain architectural coatings operations?

PPG maintains architectural coatings businesses in Latin America, Europe, and Asia Pacific, where it holds strong #1 or #2 positions in several key countries.

What is the expected margin improvement in PPG's Performance Coatings segment after the sale?

The sale is expected to result in approximately 300-basis point improvement in Performance Coatings segment margins in 2023.

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