PPG has reached a definitive agreement to sell 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.
The architectural coatings business in the U.S. and Canada represented approximately $2 billion of PPG’s 2023 total net sales, with a 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.
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. Current AIP portfolio companies generate aggregate annual revenues of approximately $25 billion and employ approximately 70,000 employees as of June 30, 2024.
The multi-year program is focused on reducing structural costs primarily in Europe and in certain other global businesses, along with other corporate costs following the two recently announced agreements to sell PPG’s silicas products business and the architectural coatings business in the U.S. and Canada. The program includes various facility closures and other targeted fixed costs. The company will record a pre-tax charge of approximately $250 million in the fourth quarter 2024, and other charges over the next several years when certain costs are incurred. In total, PPG expects the cost reduction program to impact about 1,800 positions, primarily in Europe and the U.S.
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