TAGS: Automotive Coatings
Axalta Coating Systems has entered into definitive agreements to acquire U-POL Holdings Limited ("U-POL") from Graphite Capital Management LLP and other holders for £428 million (approximately $590 million) subject to certain adjustments set forth in the Sale and Purchase Agreements for the transaction.
Strengthens Global Refinish Position
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U-POL's expertise in refinish accessories and protective coatings is highly complementary to Axalta's business and expands our addressable market into the important and growing mainstream and economy-based refinish segment as well as the consumer do-it-yourself (DIY) aftermarket," said Robert Bryant, Axalta's Chief Executive Officer.
"We also see opportunities for U-POL's technology in whitespace applications for other areas of our business, including Mobility and Industrial Coatings."
U-POL's talented global organization and its manufacturing plant and R&D lab in Wellingborough, England, bring important capabilities to the company's commercial, manufacturing, and technology organizations, enhancing Axalta's ability to serve its customers across the globe.
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The two companies' cultures of innovation, quality, and strong operating principles are exceptionally aligned," said Troy Weaver, Axalta's Senior Vice President, Global Refinish Coatings. "
We look forward to serving customers with these additional capabilities and to welcoming U-POL's dedicated team members to the Axalta family."
U-POL expects net sales of approximately $145 million and adjusted EBITDA of approximately $38 million for fiscal year 2021. Axalta expects to realize meaningful operating and commercial synergies across the combined global businesses.
Expected annual operating synergies and efficiencies of approximately $10 million are expected to be fully realized within 18 to 24 months of close. The total consideration of approximately $590 million reflects a full year 2021E adjusted EBITDA multiple of approximately 12.5x, including run rate operating synergies and efficiencies.
Additionally, the identified commercial synergy opportunities are expected to create significant value over time. Axalta expects the acquisition to be immediately accretive to adjusted EBITDA margin, excluding transaction-related costs associated with the acquisition. Axalta plans to finance the transaction from cash on hand.
The transaction is expected to close in the second half of 2021, subject to clearance under applicable antitrust laws and other customary closing requirements.
Source: Axalta