The Valspar Corporation has announced that it has agreed to acquire a significant majority of the share capital of Huarun Paints Holdings Company Limited (Huarun Paints), one of China's largest independent coatings companies, from Champion Regal, a Hong Kong based investment company. Founded in 1991, Huarun Paints has grown to become one of China's leading domestic suppliers of wood and furniture coatings and a rapidly growing supplier of architectural coatings. Huarun Paints achieved sales of approximately $180 million in 2005, primarily through its focus on the development of an extensive network of distributors and exclusive retail paint stores throughout China. The cash purchase transaction is expected to close by the end of July and to be slightly dilutive to Valspar's earnings in fiscal years 2006 and 2007.
"Valspar is pleased to expand its presence in China with Huarun Paints' management team and current shareholders as our partners," said William Mansfield, Valspar's president and CEO. "We have a high
regard for the entrepreneurial culture established by the company's
founders and the superb senior management team leading its growth. As a group, the company's current shareholders and management team will retain a minority interest in Huarun Paints. They have developed an outstanding distribution network with significant growth potential. By combining the resources of our two companies, we intend to expand Huarun Paints' product offering and geographic reach in the world's fastest growing coatings market."