PPG has announced the successful completion of the sale of its architectural coatings business in the U.S. and Canada to American Industrial Partners (AIP) for $550 million. This transaction marks a significant milestone in PPG’s ongoing strategy to optimize its portfolio and focus on areas that offer the most growth potential. While PPG has divested its U.S. and Canadian architectural coatings operations, the company’s architectural coatings businesses in other regions, including Latin America, Europe, and Asia Pacific, remain integral to its portfolio. PPG maintains dominant positions in these regions, holding strong #1 or #2 market positions in numerous key countries.
Tim Knavish, PPG’s Chairman and Chief Executive Officer, expressed his satisfaction with the deal, stating, We are pleased to complete this transaction with American Industrial Partners. I want to extend my sincere thanks to the architectural coatings U.S. and Canada employees for their dedication and commitment to the business and to PPG’s customers over the years. This transaction, along with the completed sale of our silicas products business, furthers our strategy of optimizing our portfolio, enhancing our organic growth potential, and improving financial returns. The sale will allow us to allocate resources more efficiently to areas where we have the greatest opportunity to succeed with our customers.
The architectural coatings business in the U.S. and Canada contributed approximately $2 billion to PPG’s total net sales in 2023, representing a portion of the company’s revenue but with a low-single-digit EBITDA margin. The divestiture is part of PPG’s broader effort to streamline its operations and enhance its financial profile. As previously disclosed, on a pro forma basis, PPG’s overall company sales volume would have improved by over 200 basis points over a three-year period without this business. Additionally, the company’s Performance Coatings segment’s operating income (EBIT), excluding the U.S. and Canada architectural coatings EBIT and related growth investments, would have seen a 300-basis point improvement in segment margins for 2023.
This sale follows PPG’s announcement in February 2024 that it was exploring strategic alternatives for the U.S. and Canada architectural coatings business. The company worked closely with financial advisors from Goldman Sachs & Co. LLC and legal advisors from Hogan Lovells U.S. LLP to navigate the transaction process.
Overview of the U.S. and Canada Architectural Coatings Business
PPG’s architectural coatings business in the U.S. and Canada was a key player in the residential and commercial coatings sectors, offering a broad range of well-known products under brands such as GLIDDEN®, OLYMPIC®, LIQUID NAILS®, HOMAX®, PITTSBURGH PAINTS & STAINS®, Manor Hall®, FLOOD®, DULUX® (in Canada), and SICO®, among others. These brands are trusted by homeowners and professionals alike for their high-quality paints, stains, adhesives, caulks, repair products, and sealants.
In addition to its paint and coating products, the business also offered light-duty protective coatings, primarily sold through company-owned stores. These products were manufactured across multiple facilities, including the following locations:
- Manufacturing Facilities: East Point, Georgia; Oakwood, Georgia; Louisville, Kentucky; Huron, Ohio; Reno, Nevada; Carrollton, Texas; Temple, Texas; Delta, British Columbia (Canada); and Vaughan, Ontario (Canada).
- Distribution Centers: Huron, Ohio; Oakwood, Georgia; Reno, Nevada; Aurora, Illinois; Flower Mound, Texas; Riverside, California; Reading, Pennsylvania; Carolina, Puerto Rico; Calgary, Alberta (Canada); Delta, British Columbia (Canada); Toronto, Ontario (Canada); and Moncton, New Brunswick (Canada).
Additionally, the business had a strong retail presence with over 15,000 points of sale, including 750 company-owned stores, 6,600 independent dealer locations, and 8,100 major home improvement center and retailer locations across the U.S., Canada, and Puerto Rico.
Strategic Impact of the Sale
The completion of this sale allows PPG to sharpen its focus on its remaining operations and drive growth in areas where it has a competitive advantage. By divesting a non-core business, the company expects to achieve better financial returns and invest more heavily in segments that align with its long-term growth strategy. PPG’s decision to retain its architectural coatings businesses in other regions further solidifies its commitment to maintaining a leading position in global markets, where it continues to provide high-quality products to customers.
Looking forward, PPG will continue to pursue strategic initiatives aimed at enhancing shareholder value. The sale to American Industrial Partners also represents an opportunity for the U.S. and Canada architectural coatings business to thrive under the stewardship of an experienced industrials investor. With a focus on operational excellence and long-term growth, both PPG and American Industrial Partners are well-positioned to capitalize on the evolving landscape of the coatings industry.
This transaction marks the latest step in PPG’s ongoing portfolio optimization efforts, setting the stage for future growth in its core markets and enhancing the company’s ability to respond to dynamic customer needs globally.
