PPG To Snap Up Tikkurila In $1.35B Deal Avenue Is Cautiously Optimistic
2 min readPPG Industries has entered into a definitive arrangement to snap up Finnish paint and coatings producer Tikkurila, in an all-income deal valued at €1.1 billion ($1.35 billion), together with the assumption of personal debt.
Beneath the terms of the settlement, PPG (PPG) will start off a tender supply to get all of the issued and exceptional inventory of Tikkurila at €25 in money for just about every share. The offer you cost signifies a top quality of about 66.2% to the company’s closing cost on December 17. The transaction is expected to near in the second quarter of 2021, subject matter to customary closing problems.
The paints and specialty supplies supplier stated that the mixture with Tikkurila will reinforce and broaden its geographic footprint as effectively as its products offerings in several northern and eastern European nations exactly where it has small ornamental presence.
“We will be able to deliver customers with even more paint and coatings choices by bringing together Tikkurila’s significant-high-quality and environmentally helpful ornamental goods and distribution abilities in these nations with PPG’s very well-revered industrial and protecting coatings,” mentioned PPG CEO Michael McGarry. “In addition, the mix will present new cross-advertising opportunities, advancement prospects for staff, and product methods for new segments and clients.”
Started in 1862, Tikkurila is headquartered in Vantaa, Finland with operations in 11 nations around the world. More than 80% of the company’s revenue is coming from Finland, Sweden, Russia, Poland, and the Baltic states. Its top quality manufacturers consist of Tikkurila, ALCRO, and Beckers. Tikkurila employs about 2,700 individuals globally and documented product sales of about €564 million in 2019.
The buyout offer will come a lot less than a thirty day period right after PPG declared the acquisition of Ennis-Flint, a world coatings company with a portfolio of pavement marking merchandise, for about $1.15 billion.
Subsequent the deal announcement, Deutsche Lender analyst David Begleiter lifted the stock’s cost target to $165 (13.5% upside potential) from $155 and preserved a Acquire ranking.
Begleiter claimed that PPG’s acquisition of Ennis-Flint is “strategically audio ” due to the fact it strengthens the firm’s mobility coatings franchise and puts the company on a pathway for for accelerated development as autonomous driving boosts the have to have for wider, much more obvious, a lot more reflective and more sturdy roadway markings. (See PPG inventory assessment on TipRanks)
Over-all, the rest of the Road has a cautiously optimistic outlook on the stock. The Reasonable Purchase analyst consensus is dependent on 7 Buys and 5 Retains. With shares up about 9% calendar year-to-day, the average price target of $151.09, now indicates upside prospective of 3.9% to current amounts.
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