Axalta Coating To Buy Valspar's North American Industrial Wood Coatings Unit

(RTTNews) - Axalta Coating Systems (AXTA) said that it has entered into a definitive agreement with Valspar Corp. (VAL) and Sherwin-Williams Co. (SHW) to acquire the assets related to Valspar's North American Industrial Wood Coatings business for $420 million in cash.

Valspar is divesting the business in connection with the reviews by the Federal Trade Commission (FTC) and Canadian Competition Bureau (CCB) of the proposed acquisition of Valspar by Sherwin-Williams. The business had revenues of approximately $225 million in 2016 and is one of the leading providers of coatings for OEM and aftermarket Industrial Wood markets, including building products, cabinets, flooring and furniture in North America.

Axalta noted that it intends to operate this business as a pure bolt-on. As part of the transaction, Axalta will acquire the personnel, both dedicated manufacturing sites, R&D assets and the underlying intellectual property of Valspar's North American Industrial Wood Coatings business.

The transaction is subject to the closing of the Valspar and Sherwin-Williams merger, as well as customary closing conditions and regulatory approvals, including the approval of the FTC and the CCB.

On March 20, 2017, Sherwin-Williams and Valspar announced the extension of the merger agreement to June 21, 2017. This extension, especially in light of the agreement announced today, is expected to provide more than sufficient time to complete the Valspar acquisition.