H.B. Fuller Company has signed an agreement to sell its Central American paints business to Compania Global de Pinturas S.A., (Pintuco), a company of Grupo Mundial.
H.B. Fuller's Central American paints business has a leading market position in the region with strong brands, a broad offering of quality product lines and a local manufacturing presence. Sales are made through multiple distribution channels, including retail distributors and the company's network of retail stores located throughout Central America. Its brands are well recognized, and its products are widely used for residential and commercial applications, including architectural, marine and highway safety.
"This business has a strong market position and excellent leadership," said Jim Owens, president and CEO of H.B. Fuller. "Our strategic vision is to be the best adhesives company in the world, and the paints business is not, therefore, core to our strategic plan. Our divestiture enables this business to be part of a company with a strategic position in the paint industry."
The Central American paints business began operations in Costa Rica in 1949 and has been a member of the H.B. Fuller portfolio since 1967. The business being sold includes nearly 800 employees who work across Central America and production plants and laboratories in Costa Rica, Honduras and Panama.
Based in Medellin, Colombia, Pintuco is a leading company in the paints industry in the Andean region, with a presence in Colombia, Venezuela, Ecuador, Costa Rica, Panama and the Caribbean. Grupo Mundial operates 53 companies in 12 countries and exports products to 25 countries. Group sales for 2011 were $1.073 billion. Grupo Mundial was founded in 1921 and has six company divisions: Paints, Chemicals, General Wholesaler, Water Pipes, Inks and Packaging.
The transaction's closing is subject to certain conditions, including the notification of government and regulatory authorities and should be completed within 60 days. The purchase price to be paid for the business is $120 million. In 2011, the business to be sold had revenue of $113.5 million and generated EBITDA of $13.3 million, before allocation of corporate expenses. The Central American paints business will be accounted for as a discontinued operation in H.B. Fuller's current 2012 fiscal year.