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Editorial

Columbia Paint & Coatings Co. to merge with Sherwin-Williams, Hercules acquires specialty surfactants business of Dexter Chemical L.L.C., Benjamin Moore acquires Finnaren & Haley Paint & Coatings

Mark Drukenbrod – Aug 30, 2007

Hello and welcome to your late week international coatings industry update, brought to you by SpecialChem. Continuing the theme begun earlier in the week, most of the real news in the past few days has been mergers and acquisitions. So, here we go again…

Multinational Sherwin-Williams announced on Tuesday that it plans to acquire Spokane, Washington, USA-based Columbia Paint & Coatings Co. Columbia manufactures and distributes paints and coatings in the western and northwestern regions of the United States. They operate 41 stores and employ roughly 350. Financial terms of the agreement were not disclosed. Columbia's paints and coatings will continue to be sold through its own stores, said Sherwin CEO Christopher Connor in a statement announcing the deal.

Hercules Incorporated announced yesterday that it has completed the purchase of the specialty surfactants business of Dexter Chemical L.L.C. Under terms of the agreement, Hercules Incorporated is acquiring the business related to Dexter's product portfolio of phosphate ester surfactants sold under the Strodex and Dextrol trademarks.

Commenting on the transaction, Craig Rogerson, President and Chief Executive Officer of Hercules, said, "This business is an excellent fit for Aqualon's Coatings Additives business. It will broaden Aqualon's existing portfolio of products for the paint industry and strengthen its overall market position."

A small producer, but a particular favorite of mine, Finnaren and Haley will be bought by Berkshire-Hathaway's Benjamin Moore. F&H, founded in 1913, is a regional manufacturer based in Conschohocken, PA, USA. Benjamin Moore said the acquisition is a strategic move that yields the F&H architectural coatings brand name and seven retail locations, five of which are in the greater Philadelphia area, and two in southern New Jersey. The Haley family will continue their business as the Haley Paint Company which will own and operate a select number of paint and decorating stores representing the Benjamin Moore® brand throughout the Philadelphia market. Terms of the deal were not released, but Benjamin Moore did not buy the F&H factory.

The parent company of Raabe Co. L.L.C. of Menomonee Falls has purchased the assets of Zolatone Automotive, a Los Angeles automotive coatings company and is moving its operations to the Midwest.

Quest Specialty Chemicals Inc., a portfolio company of Detroit private equity firm Huron Capital Partners L.L.C., has acquired Zolatone Automotive, a manufacturer of acrylic sealers, base coats, top coats and other coatings for the automotive, industrial and marine markets, Huron said Tuesday. Terms of the transaction were not disclosed.

Huron Capital said Zolatone will be managed under Quest's Automotive Aftermarket Unit, Matrix System Automotive Finishes. It will relocate Zolatone's operations to Quest facilities in Michigan and Wisconsin.

As we have all seen over the past few years, multinational manufacturers are beginning or improving their businesses in India.

Sherwin Williams recently bought Nitco Paints for an estimated Rs 200 crore. Nitco makes specialty exterior paints and coatings.

PPG Industries, which has a joint venture with Asian Paints for automotive paints, is setting up another plant in India, near Pune for non-automotive paints. Nippon Paints, which has licensed automotive paint technology to Berger Paints, is setting up two plants in India.

Many of the world's top paint manufacturers are already in India or are investing there via technical collaborations with Indian companies. Kansai Paints, Japan, owns over 65 % of Kansai Nerolac, the second largest paint manufacturer in India, while DuPont has licensed Nerolac technology for automotive OEM coatings.

BASF manufactures automotive paints (for OEMs and refinishes) through BASF India. DuPont and Akzo Nobel import auto refinishes, which are sold through retail outlets.

Akzo Nobel, which stands poised to drive home its acquisition of ICI, has been operating in India through a subsidiary, Akzo Nobel (India) Ltd, which manufactures marine paints, high-performance coatings, powder coatings and can coatings. In 1998, Akzo Nobel acquired Courtaulds, which also had a small presence in India.

Sigma Kalon, which was recently bought by PPG, operates in the protective coatings and marine coatings space through a small office in India.

In other news on the site, Industrial Nanotech, Inc., an emerging global leader in nanotechnology, announced that it has awarded Czech/Hungary/Slovakian distribution rights for its Nansulate product line to Sperka Izol, s.r.o...more about this news

Degussa Corporation is announcing a price increase of up to 8% for our SIPERNAT® Specialty Silicas for selected grades only, effective for shipments as of October 1, 2007...more about this news

Ecology Coatings, Inc., a leading developer of nano- engineered industrial coatings for cleaner, more efficient manufacturing, announced the election of Donald C. Campion to the company's board of directors and the appointment of Dr. William F. Coyro, Jr. to the company's business advisory board...more about this news

And finally, Nordson Corporation announced sales, earnings and earnings per share for the third quarter, which ended July 31, 2007. Worldwide sales for the quarter reached a record $257.7 million, a 14 percent increase over the same period last year...more about this news

Thank you for reading the Industry Letter!

Best,
Mark Drukenbrod
editor@paintandcoatings.com

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