PPG to Acquire Coatings Manufacturer VersaFlex

Rhea-AI Summary

PPG (NYSE: PPG) has announced a definitive agreement to acquire VersaFlex, a company specializing in polyurea, epoxy, and polyurethane coatings, primarily for water and wastewater infrastructure. The acquisition, expected to close in Q1 2021, will enhance PPG's product offerings and expand its market capabilities. VersaFlex, part of DalFort Capital Partners, recorded an estimated 2020 revenue of $70 million and operates three manufacturing sites. This strategic acquisition aims to strengthen PPG's technology portfolio and customer engagement.

Positive

• Acquisition of VersaFlex enhances PPG's product offerings in the coatings sector.
• VersaFlex's 2020 revenue estimated at $70 million indicates strong market presence.
• Acquisition supports PPG's strategy to expand into new market segments.

Negative

• Financial terms of the acquisition were not disclosed, raising concerns about potential financial strain.
• Integration challenges may arise due to the differing operational cultures of PPG and VersaFlex.

PPG (NYSE:PPG) today announced that it has reached a definitive agreement to acquire VersaFlex, a manufacturer specializing in polyurea, epoxy and polyurethane coatings for water and waste water infrastructure, flooring, transportation infrastructure, and industrial applications. VersaFlex is a portfolio company of DalFort Capital Partners. The transaction is expected to close in the first quarter of 2021, subject to customary closing conditions. Financial terms were not disclosed.

“VersaFlex’s attractive segment mix with strong growth outlook, unique product offering, broad expertise, and manufacturing capabilities in polyurea and flooring coatings will complement and expand upon PPG’s current product offering,” said Ram Vadlamannati, PPG senior vice president, protective and marine coatings (PMC) and president, Europe, Middle East and Africa. “This acquisition supports PPG’s commitment to growing our industry-leading technology portfolio and customer touchpoints.”

VersaFlex is an aggregation of four U.S.-based protective coatings companies, consisting of legacy VersaFlex, Raven Lining Systems, Milamar Coatings and Specialty Products, Inc., which were acquired by DalFort Capital from 2017-2019. VersaFlex has approximately 130 employees and its full year 2020 revenue is expected to be approximately $70 million. The company operates three manufacturing sites located in Kansas, Oklahoma and Washington.

PPG: WE PROTECT AND BEAUTIFY THE WORLD™

At PPG (NYSE:PPG), we work every day to develop and deliver the paints, coatings and materials that our customers have trusted for more than 135 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 $15.1 billion in 2019. We serve customers in construction, consumer products, industrial and transportation markets and aftermarkets. To learn more, visit www.ppg.com.

About DalFort Capital Partners

DalFort Capital Partners is a sector-focused investment firm based in Dallas, Texas, specializing in partnering with entrepreneurs and management teams in the lower middle market. The company works collaboratively to strengthen a company's strategic and financial position through operational improvements and acquisitions of complementary businesses. DalFort specialize in identifying and executing strategic add-on acquisitions for our portfolio companies that enhance the company's relationship with existing customers and expand its reach into new geographies or market niches.

Forward-Looking Statements

The forward-looking statements contained herein include statements relating to the timing of and expected benefits of the VersaFlex acquisition and VersaFlex’s expected 2020 revenue. Actual events may differ materially from current expectations and are subject to a number of risks and uncertainties, including the satisfaction of the conditions of the acquisition, and other risks related to completion of the acquisition and actions related thereto; the parties’ ability to complete the acquisition on the anticipated terms and schedule, including the ability to obtain regulatory approvals; the ability of PPG to achieve the expected benefits of the acquisition; the achievement of VersaFlex’s expected 2020 revenue; and the other risks and uncertainties discussed in PPG’s 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.

We protect and beautify the world is a trademark and the PPG Logo is a registered trademark of PPG Industries Ohio, Inc.

CATEGORY Protective and Marine Coatings
CATEGORY Financial

View source version on businesswire.com: https://www.businesswire.com/news/home/20210105005526/en/

FAQ

What is the significance of PPG's acquisition of VersaFlex?

The acquisition enhances PPG's product offering in coatings and expands its capabilities in water and wastewater infrastructure.

When is the PPG and VersaFlex acquisition expected to close?

The transaction is expected to close in the first quarter of 2021, subject to customary closing conditions.

What was VersaFlex's estimated revenue for 2020?

VersaFlex is expected to report approximately $70 million in revenue for the year 2020.

Who owns VersaFlex prior to the acquisition by PPG?

VersaFlex is a portfolio company of DalFort Capital Partners.