PPG (NYSE: PPG) has officially completed the sale of its U.S. and Canada architectural coatings business to American Industrial Partners (AIP), an industrial investment firm. The transaction, valued at $550 million, marks a significant step in PPG’s portfolio optimization strategy, allowing the company to focus on areas with higher growth potential and stronger financial returns.
Commitment to Excellence and Transition
“We are pleased to complete this transaction with American Industrial Partners,” said Tim Knavish, PPG Chairman and CEO. “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.” Knavish emphasized that this strategic move aligns with PPG’s long-term goals, enabling the company to channel resources more effectively toward areas where it holds a competitive advantage.
This sale follows PPG’s earlier divestiture of its silicas products business. Collectively, these actions aim to enhance the company’s organic growth potential and financial performance. By excluding the U.S. and Canada architectural coatings segment from its operations, PPG projects improved sales volume trends and a 300-basis-point boost to its Performance Coatings segment margins on a 2023 pro forma basis.
A Strong Legacy in Architectural Coatings
PPG’s former U.S. and Canada architectural coatings business is a recognized leader in the residential and commercial coatings industry. Its portfolio includes iconic brands such as GLIDDEN®, OLYMPIC®, LIQUID NAILS®, HOMAX®, PITTSBURGH PAINTS & STAINS®, Manor Hall®, FLOOD®, DULUX® (in Canada), and SICO®. These products span interior and exterior paints, stains, adhesives, caulks, and repair solutions, serving homeowners and professionals alike.
The business operated more than 15,000 points of sale across the U.S., Canada, and Puerto Rico. These included 750 company-owned stores, 6,600 independent dealer locations, and 8,100 major home improvement and retail outlets. Manufacturing facilities were located in East Point and Oakwood, Georgia; Louisville, Kentucky; Huron, Ohio; Reno, Nevada; Carrollton and Temple, Texas; Delta, British Columbia; and Vaughan, Ontario. Additionally, the business maintained a network of distribution centers and leased office spaces for its leadership teams.
Broader PPG Focus Remains Intact
While the U.S. and Canada operations have been sold, PPG’s architectural coatings businesses in Latin America, Europe, and the Asia-Pacific region remain core components of the company’s portfolio. PPG maintains strong market positions—ranked #1 or #2 in several key countries within these regions.
AIP’s Vision for the Business
American Industrial Partners, a firm managing approximately $16 billion in assets, is well-known for its expertise in industrial sectors. AIP’s approach involves partnering with strong management teams to implement robust operating agendas, driving long-term value creation. The firm’s current portfolio generates annual revenues of approximately $25 billion and employs 70,000 people globally.
AIP’s acquisition of PPG’s U.S. and Canada architectural coatings business reflects its strategy of investing in quality industrial companies and unlocking their full potential. With an extensive network of facilities and a legacy of market leadership, the newly acquired business is poised for continued growth under AIP’s stewardship.
Strategic Alignment with Market Trends
The transaction aligns with PPG’s broader initiative to refine its portfolio and focus on markets where it has a distinct competitive edge. Knavish reiterated the company’s commitment to leveraging its global presence in architectural coatings outside of North America. “This move allows us to enhance our financial return profiles and strengthen our ability to deliver value to our shareholders,” he stated.
Advisors and Closing Notes
The strategic review process for this transaction began on February 26, 2024. Goldman Sachs & Co. LLC acted as PPG’s exclusive financial advisor, while Hogan Lovells U.S. LLP served as its legal counsel.
This divestiture represents a pivotal moment for PPG as it continues to evolve its business model, capitalizing on opportunities to maximize growth and shareholder value. Meanwhile, AIP stands ready to further develop and expand the acquired business, building on its established legacy in the architectural coatings sector.
