Axalta Coating Systems has announced that it has entered into definitive agreements to acquire U-POL Holdings Limited (“U-POL”) from Graphite Capital Management LLP and other holders for £428 million, subject to certain adjustments set forth in the Sale and Purchase Agreements for the transaction.
Founded in 1948 and based in the United Kingdom, U-POL is a manufacturer of repair and refinish products used primarily for automotive refinish and aftermarket protective applications. The business produces a wide range of automotive refinishing products and accessories including fillers, coatings, aerosols, adhesives and paint-related products as well as other automotive aftermarket protective coatings. U-POL sells its products in over 100 countries and is known for its leading brands including Raptor, Dolphin and Gold, among others.
Axalta said it will accelerate growth of U-POL products by expanding market access through Axalta’s existing sales and distribution channels while leveraging U-POL’s distribution channels to extend the reach of its Refinish Coatings portfolio to new customers.
“Axalta is the world leader in the premium refinish coatings segment,” said Robert Bryant, Axalta’s Chief Executive Officer. “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. We also see opportunities for U-POL’s technology in whitespace applications for other areas of our business, including Mobility and Industrial Coatings.”
Axalta said U-POL’s global organisation and its manufacturing plant and R&D lab in Wellingborough, England, bring important capabilities to the company’s commercial, manufacturing and technology organisations, enhancing Axalta’s ability to serve its customers across the globe.
“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.”
Axalta said it expects to realise meaningful operating and commercial synergies across the combined global businesses. Expected annual operating synergies and efficiencies of approximately US$10 million are expected to be fully realised within 18 to 24 months of the deal closing. The total consideration of £428 million reflects a full year 2021E adjusted EBITDA multiple of approximately 12.5 times, including run rate operating synergies and efficiencies. Additionally, Axalta believes the identified commercial synergy opportunities are expected to create significant value over time. The company expects the acquisition to immediately boost adjusted EBITDA margin, excluding transaction-related costs associated with the acquisition, and 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.