Back to top

Image: Bigstock

PPG Industries (PPG) to Buy MetoKote from Platinum Equity

Read MoreHide Full Article
PPG Industries Inc. (PPG - Free Report) has announced the signing of a definitive agreement to acquire Lima, OH-based industrial coatings services provider MetoKote Corporation and its affiliates from Platinum Equity. 
 
The deal is expected to close in the third quarter of 2016, dependent on customary closing conditions. MetoKote generated sales worth roughly $200 million in 2015. The financial terms of the deal have been kept under wraps. 
 
Being a leading player in the protective coating applications space, MetoKote serves over 800 customers globally. The company will provide PPG Industries with a platform to understand and meet different customers’ critical coatings requirements. The company, employing over 1,500 workers, provides on-site coatings services to numerous manufacturing facilities as well as regional service centers in the U.S., Canada, Mexico, the U.K., Germany, Hungary and the Czech Republic. 
 
Customers ship parts to the service centers for the enhancement of paint adhesion and painting with electrocoat, liquid or powder coating technologies. Treated parts are then shipped back to the customers for assembling. On an average, MetoKote coats 1.5 million parts daily. 
 
MetoKote was acquired by Platinum Equity in Oct 2013. Since then the mergers, acquisitions and operating firm has boosted MetoKote’s business, diversifying its customer base, strengthening its key customer relationships and positioning it for long-term growth. MetoKote’s size, capabilities and geographic reach when combined with PPG Industries’ technology, will provide customers with efficient and innovative coatings operations. 
 
PPG Industries aims to acknowledge and provide a solution for customers' need to streamline the purchasing, delivery and application of coatings with this acquisition. It will help customers concentrate on product design and manufacturing and simplify operations. 
 
Shares of PPG Industries rose around 3.2% in the trading session on Wednesday, closing the day at $110.95.
 
PPG Industries performed well in the first quarter of 2016. Its adjusted earnings rose 11% year over year in the quarter, the thirteenth consecutive quarter of double-digit growth in earnings, and also beat the Zacks Consensus Estimate by a penny. The results were aided by higher sales volume, cost management and acquisition-related gains. However, sales of $3.7 billion lagged the Zacks Consensus Estimate. The company’s past acquisitions contributed 3% to total sales in the quarter. 
 
The company is working on developing as well as commercializing new consumer-driven technology. Improvised branding strategies are also being undertaken. As in the past, the company is focusing on reducing costs and completing the previously announced restructuring program. PPG Industries has also reaffirmed its plans to deploy $2–$2.5 billion cash in the 2015–2016 period toward acquisitions and share repurchases.
 
PPG Industries currently holds a Zacks Rank #2 (Buy). 
 
Some other favorably ranked companies in the chemical space include Akzo Nobel N.V. (AKZOY - Free Report) , BASF SE (BASFY - Free Report) and Axiall Corporation , all sporting a Zacks Rank #1 (Strong Buy). 
 
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>

Unique Zacks Analysis of Your Chosen Ticker


Pick one free report - opportunity may be withdrawn at any time


PPG Industries, Inc. (PPG) - $25 value - yours FREE >>

BASF SE (BASFY) - $25 value - yours FREE >>

Akzo Nobel NV (AKZOY) - $25 value - yours FREE >>

Published in