PPG Reviews Strategic Alternatives for Architectural Coatings Business in U.S. & Canada
PPG is reviewing its architectural coatings business in the U.S. and Canada. The company affirms that the review is routine strategic in nature.
PPG 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. The company held a conference call to discuss the strategic review of its U.S. and Canada architectural coating business on Feb. 26, 2024.
In total, the PPG 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, says, “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.”
These actions reflect a regular and disciplined strategic assessment process by the PPG board and management team, including ensuring each of its businesses delivers value for customers and shareholders, and aligns with the growth and investment strategies for the company.
Despite the business delivering flat sales volumes in 2023, PPG claims that on a three-year pro forma basis, its overall company sales volume results would have improved cumulatively by over 200 basis points excluding the architectural coatings business in the U.S. and Canada. It further claims that the company’s performance coatings segment operating (EBIT) income, excluding the U.S. and Canada architectural coatings EBIT and the associated growth-related investments the company has 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.
