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 United States and Canada. In 2023, the architectural coatings business in the United States and Canada represented approximately 10% of PPG’s total net sales.
PPG’s architectural coatings business in the United States and Canada, which operates within the company’s performance coatings segment, is a leader in residential and commercial architectural coatings through its 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 United States and Canada.
Tim Knavish, PPG chairman and chief executive officer, 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 three-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 made by the company, 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 stated that it 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 United States and Canada does not include its architectural coatings businesses in the other regions around the world, including in Latin America, Europe and Asia-Pacific.
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 Georgia, Ohio, Kentucky, Texas, California, Nevada, Illinois, Pennsylvania, Puerto Rico, and British Columbia, Alberta, and Ontario, Canada. The business has a footprint in the United States and Canada of approximately 750 company owned stores.
Learn more about PPG at www.ppg.com.
