PITTSBURGH--(BUSINESS WIRE)--PPG (NYSE: PPG), a global leader in paints, coatings, and specialty materials, today announced that it has engaged Goldman Sachs & Co. LLC as financial advisor to assist in a review of strategic alternatives for its architectural coatings business in the U.S. and Canada.
PPG’s architectural coatings business in the U.S. and Canada, which operates within the company’s performance coatings segment, is an industry leader in residential and commercial architectural coatings through its well-known portfolio of brands, including GLIDDEN®, OLYMPIC®, LIQUID NAILS®, HOMAX®, PITTSBURGH PAINTS & STAINS®, Manor Hall®, FLOOD®, DULUX® (in Canada), and SICO®, among others. The business manufactures and sells interior and exterior paints, stains, caulks, repair products, adhesives, and sealants for homeowners and professionals. It also includes certain light-duty protective coatings products that are primarily sold through company-owned stores and manufactured through a common factory footprint.
In total, the distribution network includes more than 15,000 touchpoints through company-owned stores, independent dealer locations, and major home improvement centers and retailers across the U.S. and Canada. In 2023, the architectural coatings business in the U.S. and Canada represented approximately 10% of PPG’s total net sales.
PPG Chairman and Chief Executive Officer, Tim Knavish, said, “The architectural coatings business in the U.S. and Canada has a well-established position in a growing market, leading brands, proven innovation, established customers, and dedicated and talented employees. We have made considerable progress over the past several years in modernizing the architectural coatings business model to better position the business for continued success. This has included instituting value-added customer-facing digital tools, revamping our manufacturing and distribution footprint, transitioning towards an asset-light distribution model, and introducing innovative products that enhance customer productivity and sustainability. Our actions over the past several years have created positive momentum in the business as we have significantly increased the number of distribution points for our well-known brands. These changes have been recognized in the industry and validate the progress of the business’ transformed strategy. The business is now poised to accelerate this transformation.
“We are exploring this strategic review now given the positive momentum in the business, with the intent of ensuring its continued growth and success while also maximizing the value for PPG and its shareholders. We will assess whether some or all of the business could be better suited to grow faster with a partner or different owner, or may be better suited to operate as a core business within another company, as a standalone entity, or in a joint venture. Our review will help to determine if any of these alternative structures will provide the business with more speed and accelerated growth capability. Throughout this process, we will continue to fully support the business, our employees, and our architectural coatings customers throughout the U.S. and Canada.
“In January, we announced a strategic review of alternatives for our silica products business and are now also conducting a review of our architectural coatings U.S. and Canada business. These actions reflect a regular and disciplined strategic assessment process by our Board and management team, including ensuring each of our businesses delivers value for our customers and shareholders, and aligns with the growth and investment strategies for the company,” said Knavish.
Despite the business delivering flat sales volumes in 2023, on a 3-year pro forma basis PPG’s overall company sales volume results would have improved cumulatively by over 200 basis points excluding the architectural coatings U.S. and Canada business. Also, the company’s Performance Coatings segment operating (EBIT) income, excluding the U.S. and Canada architectural coatings EBIT and the associated growth-related investments we have made, would have resulted in an approximately 300-basis point improvement in segment margins in 2023.
The timing and outcome of the strategic review is uncertain. There is no assurance that the review will result in any transaction or other outcome. PPG does not intend to disclose developments or provide updates on the progress or status of the review unless and until it deems further disclosure is appropriate or required. PPG’s strategic review of its architectural coatings business in the U.S. and Canada does not include its architectural coatings businesses in the other regions around the world, including in Latin America, Europe and Asia Pacific, where PPG holds strong #1 or #2 positions in a number of key countries.
The architectural coatings business in the U.S. and Canada is led by about 6,600 employees, and manufactures and distributes products through dedicated facilities in:
- Manufacturing: East Point, GA; Oakwood, GA; Louisville, KY; Huron, OH; Reno, NV; Carrollton, TX; Temple, TX; Delta, BC (Canada); and Vaughan, ON (Canada).
- Distribution: Huron, OH; Oakwood, GA; Reno, NV; Aurora, IL; Flower Mound, TX; Riverside, CA; Reading, PA; Carolina, PR (Puerto Rico); Calgary, AB (Canada); Delta, BC (Canada); Toronto, ON (Canada); and Moncton, NB (Canada).
The architectural coatings business’ footprint in the U.S. and Canada includes approximately 750 company owned stores in the U.S. (including Puerto Rico) and Canada.
In addition, its headquarters is located in Cranberry, PA, which includes the leadership and administrative team for the business. The business also has an office in Vaughan, ON (Canada) and Boucherville, QC (Canada), which includes additional administrative teams.
The company will hold a conference call to discuss the strategic review of its US and Canada architectural coating business today, February 26, at 9:00 a.m. ET. Participants can pre-register for the conference by navigating to https://www.netroadshow.com/events/login?show=d5d8bf31&confId=61593 . The conference call also will be available in listen-only mode via Internet broadcast from the PPG Investor Center at www.ppg.com. A telephone replay will be available February 27, beginning at approximately 11:00 a.m. ET, through March 11, at 11:59 p.m. ET. The dial-in numbers for the replay are: in the United States, 1-833-470-1428; Canada, 1-226-828-7575; UK, (Local) 20-8068-2558; international, +44-20-8068-2558; passcode 947016. A Web replay also will be available shortly after the call on the PPG Investor Center at www.ppg.com, and will remain through Wednesday, February 26, 2025.
PPG: WE PROTECT AND BEAUTIFY THE WORLD®
At PPG (NYSE:PPG), we work every day to develop and deliver the paints, coatings and specialty materials that our customers have trusted for over 140 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 $18.2 billion in 2023. We serve customers in construction, consumer products, industrial and transportation markets and aftermarkets. To learn more, visit www.ppg.com.
The PPG Logo, We protect and beautify the world are registered trademarks of PPG Industries Ohio, Inc.
Forward-Looking Statements
Statements contained in this press release relating to matters that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements about the future performance of PPG’s architectural coatings business and potential outcomes of the review of strategic alternatives for the business. You can identify forward-looking statements by the fact that they do not relate strictly to current or historic facts. Forward-looking statements are identified by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “outlook,” “forecast” and other expressions that indicate future events and trends. Many factors could cause actual results to differ materially from the forward-looking statements contained herein. Such factors include the potential outcome of the review of strategic alternatives for the business; the timing of any transaction and whether any transaction will be entered into or consummated at all; the terms, structure, benefits and costs of any transaction; the risk that the review and its announcement could have an adverse effect on the architectural coatings business or PPG’s results of operations; the risk that the review could divert the attention and time of PPG’s management; the risk of any unexpected costs or expenses resulting from the review; the risk of any litigation relating to the review and the risks and uncertainties described in our Annual Report on Form 10-K for the year ended December 31, 2023 and those described from time to time in our future reports filed with the Securities and Exchange Commission. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements.
All information in this press release speaks only as February 26, 2024, and any distribution of this release after that date is not intended and will not be construed as updating or confirming such information. PPG undertakes no obligation to update any forward-looking statement, except as otherwise required by applicable law.
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