• Login
    • Join
  • FOLLOW:
  • Subscribe Free
    • Magazine
    • eNewsletter
    Checkout
    • Magazine
    • News
    • Research
    • Markets & Technologies
    • Raw Materials
    • Top Companies
    • Directories
    • Jobs
    • Events
    • Microsites
    • More
  • Magazine
  • News
  • Research
  • Markets & Technologies
  • Raw Materials
  • Top Companies
  • Directories
  • Jobs
  • Events
  • Microsites
  • Current / Back Issues
    Features
    Business Corner
    Editorial
    Digital Edition
    eNewsletter Archive
    Our Team
    Editorial Guidelines
    Subscribe Now
    Advertise Now
    World Reports
    eBook
    Top Features
    Powder Coatings Market

    Performance Enhancing Additives

    The Role Of Kilowatt Hours In Measuring Mill Performance

    The 2023 Marine Coatings Market

    PPG: Treated Silicas Enable Tire Manufacturing Energy Savings and Reduced Complexity
    Breaking News
    Online Exclusives
    Distributor News
    Financial News
    Paint & Coatings Manufacturer News
    People In the News
    Price Increases
    Product News
    Raw Materials & Equipment
    Video Bites
    Suppliers News
    Live From Shows
    Top News
    AkzoNobel Names Sweet Embrace as Interpon Color of the Year 2024

    PPG’s New Paint for a New Start Transforms 27 Schools Worldwide with Colorful Makeovers

    PPG's New Paint for a New Start Initiative Transforms School for Children with Autism in Spain

    OQ Chemicals Announces Price Increases for Oxo Intermediates

    R.E. Carroll Inc. Packs and Donates 400 Backpacks to Students
    Top Companies report
    Market Research
    White Papers / Tech Papers
    Technical Papers
    Product Spec Sheets
    World Reports
    Adhesives and Sealants
    Aerospace Coatings
    Architectural Coatings
    Automotive Coatings
    Automotive Refinish
    Business Operation
    Color Trends & Forecast
    Construction Chemicals
    Corrosion Control
    Industrial Coatings
    Laboratory Equipment
    Marine Coatings
    Market Trends & Forecast
    Powder Coatings
    Production Equipment
    Radcure Coatings
    Special Purpose Coatings
    Wood Coatings
    "Green" Coatings

    AkzoNobel Names Sweet Embrace as Interpon Color of the Year 2024

    PPG’s New Paint for a New Start Transforms 27 Schools Worldwide with Colorful Makeovers

    PPG's New Paint for a New Start Initiative Transforms School for Children with Autism in Spain

    PPG’s New Paint for a New Start Initiative Updates Educational Facility

    Hempel Inaugurates Production Facilities in China
    Additives
    Binders
    Pigments
    Solvents

    OQ Chemicals Announces Price Increases for Oxo Intermediates

    BASF Broadens Monomers Portfolio, Launches Bio-based 2-Octyl Acrylate

    “MyCarbonFootprint”: BASF Launches Dashboard for Sustainable Procurement

    Arxada Appoints Sanjeev Rastogi as CEO

    Birla Carbon Releases its 11th Sustainability Report
    Company Capabilities
    Buyers Guide
    Distributor Guide
    Add New Company
    International Buyers Guide Companies
    Shepherd Color Company, The

    Arkema

    Clariant Additives

    W. R. Grace & Co.

    EPS
    Industry Events
    Webinars
    Live From Show Event
    Top Events
    The Gulf Coatings Show

    Western Coatings Symposium 2023

    Pacific Coatings Show

    CHINACOAT 2023

    ABRAFATI 2023
    Companies
    White Papers/Tech Papers
    Product Spec Sheets
    Equipment
    Literature/Brochures
    Videos
    International Buyers Guide Companies
    Shepherd Color Company, The

    Arkema

    Clariant Additives

    W. R. Grace & Co.

    EPS
    • Magazine
      • Current / Back Issues
      • Features
      • Editorial
      • Business Corner
      • Digital Edition
      • eNewsletter Archive
      • Editorial Guidelines
      • Subscribe Now
      • Advertise Now
    • Breaking News
    • Directories
      • Buyers Guide
      • Distributor Guide
      • Corporate Capabilities
      • Trade Associations
      • Add Your Company
    • Markets & Technologies
      • Adhesives and Sealants
      • Aerospace Coatings
      • Architectural Coatings
      • Automotive Coatings
      • Automotive Refinish
      • Business Operation
      • Color Trends & Forecast
      • Construction Chemicals
      • Corrosion Control
      • Industrial Coatings
      • Laboratory Equipment
      • Marine Coatings
      • Market Trends & Forecast
      • Powder Coatings
      • Production Equipment
      • Radcure Coatings
      • Special Purpose Coatings
      • Wood Coatings
      • "Green" Coatings
    • Raw Materials
      • Additives
      • Binders
      • Pigments
      • Solvents
    • World Reports
      • Africa Report
      • China Report
      • India/Asia Pacific Report
      • Europe Report
      • Latin America Report
      • Market Research
      • Russian Report
    • Top Companies
    • Online Exclusives
    • Glossary
    • Slideshows
    • Experts Opinions
    • Blog
    • eBook
    • Infographics
    • Videos
    • Podcasts
    • Whitepapers
    • Jobs
    • Microsites
      • Companies
      • White Papers/Tech Papers
      • Product Spec Sheets
      • Equipment
      • Literature/Brochures
      • Videos
    • Events
      • Industry Events
      • Live From Show Event
      • Webinars
    • About Us
      • About Us
      • Contact Us
      • Advertise With Us
      • Privacy Policy
      • Terms of Use
    Blog

    Searching for Opportunities…

    ...

    Searching for Opportunities…
    Ben Scharff, Managing Director, Grace Matthews08.13.18
    As often noted of recent, the number of mid-sized independent coating companies, and those supplying raw materials to them, continues to diminish.  While this decreases the obvious pool of potential coatings and materials supplier acquisition candidates, it has done nothing to diminish the appetite of those seeking to acquire them.   Attempting to fill the void, while simultaneously increasing its impact, are private equity buyers.  We are seeing fewer and fewer transactions in the coatings space involving sellers of multi-generational, family-owned businesses, and an increasing number of transactions from financially-backed platform companies executing a buy-and-build strategy.  The velocity at which companies trade hands is also increasing, and private equity is pushing this pace.
      
    One reason why private equity (PE) seems to be increasing transactions in the coatings space is the many benefits for owners. With PE transactions, owners are often provided a soft landing to selling their business where they can continue to remain active in operations.  PE also allows owners to diversify their risk of having an over weighted amount of their personal net worth tied up in their business while still enjoying the upside of remaining invested in the asset they know best.  With market tailwinds as they are, we have seen some meaningful “second bites of the apple” for sellers to private equity or private equity-owned businesses as well.  Some of the notable current middle-market coatings platforms include Audax Group’s ICP, Huron Capital’s Valentus, and Tonka Bay Equity’s Fenix (formerly called Sierra).  Additionally, there are dozens of other funds building or looking to build platforms in coatings and related materials. 

    While trying to keep up with the pace of play from PE buyers, the leaders in the coatings space continue to consummate their fair share of deals.  The focus and motivations of PPG, Akzo Nobel, Sherwin Williams, Axalta and RPM appear to differ at present, however, one thing they have in common is that these coatings behemoths continue to trade at higher-than-normal valuations and inherently have growth already built into their stock price.  As such, these businesses have tremendous pressure to use their balance sheet to find growth – acquisition being the quickest route to do so. 

    To take a deeper look into the coatings leaders and provide a prediction for their next M&A move:
    • PPG has the healthiest balance sheet of the group and an appetite to do something meaningful (possibly another run at Akzo Nobel?). 
    • Akzo Nobel seems to be getting its feet back under itself with its new CEO and the ongoing divestiture of its specialty chemicals business. 
    • Sherwin Williams has to make good on the price paid for Valspar, and therefore it remains fairly focused on ensuring that the business is properly and thoughtfully integrated.
    • Axalta continues to pursue opportunities to aggressively diversify away from automotive and has picked up some nice assets along the way. 
    • RPM continues to pursue smaller, safe acquisitions that it can drive through its extensive distribution channel. 

    As the industry continues to consolidate, buyers are digging deeper for acquisitions.  With so many chasing so few stand-alone assets, proactively pursuing corporate carve-outs seems to be an area gaining increased focus.  Finding assets nested within larger companies that can be peeled out, while challenging to execute, can provide substantial opportunities and upside for other strategics and PE-owned platforms.  While doable, the complexities and lack of infrastructure transferring with most of these deals can make it economically unappealing to some private equity buyers without a current platform to roll them into.  

    While many believe that we are witnessing an end game to consolidation in coatings, I’m not certain I would call it that.  The M&A activity in the coatings industry feels more like a very aggressive game of “go fish” going on out in the market, whereby everyone is looking to upgrade their hand by pushing hard to attract and acquire the assets that best align with their portfolio and strategy.  However, there still remains opportunities for deal making to be had in the market, you may just have to dig a little deeper to find them.


    Ben Scharff, managing director at Grace Matthews


    Grace Matthews, Inc., a Milwaukee-based investment bank, provides merger, acquisition and corporate finance advisory services to private and public companies across the chemicals and materials value chain.  Grace Matthews is known globally for completing successful chemical industry transactions dating back to the early 1990s.  Grace Matthews’ principals have completed over 150 transactions involving global corporations such as Akzo Nobel, 3M, Lubrizol, BASF, DuPont, Sherwin-Williams, PPG Industries, Axalta, Eastman, Ashland, W.R. Grace, Ceradyne, DSM, ICI, Borregaard, Air Products, Landec Corporation, The Home Depot, ITW, Hexion Specialty Chemicals, Atofina Chemicals, Brush Engineered Materials, Becker Industrial Coatings, RPM International, Weatherford International, Hempel, PolyOne, Evonik Industries, Courtaulds, Domino Sugar, and Chr. Hansen Laboratories.
    Related Searches
    • sherwin-williams
    • merger
    • ppg industries
    • chemical
    Suggested For You
    SI Group Signs Agreement to Sell Industrial Resins Business to ASK Chemicals SI Group Signs Agreement to Sell Industrial Resins Business to ASK Chemicals
    LSI Launches as an Independent Global Specialty Chemicals Business LSI Launches as an Independent Global Specialty Chemicals Business
    A Comprehensive Overview of the Construction Chemicals Market A Comprehensive Overview of the Construction Chemicals Market
    Aakash Chemicals Rebrands as Vivify Specialty Ingredients Aakash Chemicals Rebrands as Vivify Specialty Ingredients
    Q&A: The ChemQuest Group Q&A: The ChemQuest Group
    LANXESS Acquiring Emerald Kalama Chemical LANXESS Acquiring Emerald Kalama Chemical
    Huntsman Finalizes Acquisition of Gabriel Performance Products Huntsman Finalizes Acquisition of Gabriel Performance Products
    BASF Agrees to Sell Kankakee, Illinois Site to One Rock Capital Partners BASF Agrees to Sell Kankakee, Illinois Site to One Rock Capital Partners
    Huntsman to Acquire Gabriel Performance Products Huntsman to Acquire Gabriel Performance Products
    Marine Coatings Market Marine Coatings Market
    Axalta Launches Eleglas Glass, Ceramic Coatings Portfolio Axalta Launches Eleglas Glass, Ceramic Coatings Portfolio
    Axalta Increases Prices for Refinish Products in Europe Axalta Increases Prices for Refinish Products in Europe
    Axalta Expands its Liquid Coatings Production Facility in North America Axalta Expands its Liquid Coatings Production Facility in North America
    Axalta – Analyst Sees Potential for Consolidating Deals After Investor Day Axalta – Analyst Sees Potential for Consolidating Deals After Investor Day
    W.R. Grace and Co. – Analyst on Investor Day, Chart for Growth W.R. Grace and Co. – Analyst on Investor Day, Chart for Growth

    Related Breaking News

    • Binders | Breaking News | Industry News
      SI Group Signs Agreement to Sell Industrial Resins Business to ASK Chemicals

      SI Group Signs Agreement to Sell Industrial Resins Business to ASK Chemicals

      Agreement includes products, technology, and manufacturing assets in Brazil, India, and South Africa.
      07.23.21

    • Additives | Breaking News | Industry News
      LSI Launches as an Independent Global Specialty Chemicals Business

      LSI Launches as an Independent Global Specialty Chemicals Business

      Lonza Specialty Ingredients business (LSI) successfully carved out from Lonza Group.
      07.02.21

    • Adhesives and Sealants | Construction Chemicals
      A Comprehensive Overview of the Construction Chemicals Market

      A Comprehensive Overview of the Construction Chemicals Market

      Rise in urbanization is estimated to be the main cause for the surge in the global construction chemicals market in the coming years.
      Chaitali Avadhani , Research Dive 05.17.21


    • Additives | Breaking News | Industry News
      Aakash Chemicals Rebrands as Vivify Specialty Ingredients

      Aakash Chemicals Rebrands as Vivify Specialty Ingredients

      CenterOak Partners rebrands Aakash Chemicals to Vivify, uniting three subsidiaries under new name.
      05.14.21

    • Breaking News
      Q&A: The ChemQuest Group

      Q&A: The ChemQuest Group

      Coatings World interviews The ChemQuest Group and ChemQuest Technology Institute Directors, Karl Davenport and Pete Smith.
      Kerry Pianoforte, Editor 02.18.21

    Loading, Please Wait..
    Trending
    • Sherwin-Williams Introduces High-Flexibility Body Filler
    • BASF Broadens Monomers Portfolio, Launches Bio-based 2-Octyl Acrylate
    • Axalta’s Brian Berube To Retire
    • “MyCarbonFootprint”: BASF Launches Dashboard For Sustainable Procurement
    • Masco Corporation Names Richard Westenberg VP, CFO
    Breaking News
    • AkzoNobel Names Sweet Embrace as Interpon Color of the Year 2024
    • PPG’s New Paint for a New Start Transforms 27 Schools Worldwide with Colorful Makeovers
    • PPG's New Paint for a New Start Initiative Transforms School for Children with Autism in Spain
    • OQ Chemicals Announces Price Increases for Oxo Intermediates
    • R.E. Carroll Inc. Packs and Donates 400 Backpacks to Students
    View Breaking News >
    CURRENT ISSUE

    September 2023

    • Powder Coatings Market
    • Performance Enhancing Additives
    • The Role Of Kilowatt Hours In Measuring Mill Performance
    • View More >

    Cookies help us to provide you with an excellent service. By using our website, you declare yourself in agreement with our use of cookies.
    You can obtain detailed information about the use of cookies on our website by clicking on "More information”.

    • About Us
    • Privacy Policy
    • Terms And Conditions
    • Contact Us

    follow us

    Subscribe
    Nutraceuticals World

    Latest Breaking News From Nutraceuticals World

    PLT Health Solutions Granted Claims for Botanical Ingredient in Canada
    CRN Files Petition with FTC For Clarity on Health Products Compliance Guidance
    Vitafoods Europe Relocates to Barcelona Starting 2025
    Coatings World

    Latest Breaking News From Coatings World

    AkzoNobel Names Sweet Embrace as Interpon Color of the Year 2024
    PPG’s New Paint for a New Start Transforms 27 Schools Worldwide with Colorful Makeovers
    PPG's New Paint for a New Start Initiative Transforms School for Children with Autism in Spain
    Medical Product Outsourcing

    Latest Breaking News From Medical Product Outsourcing

    Moon Surgical Completes First U.S. Cases with Maestro System
    Senseonics Finishes 365-Day CGM Study Cohort
    Surface Solutions Group to Showcase GlideMed Coating at MD&M
    Contract Pharma

    Latest Breaking News From Contract Pharma

    WuXi Vaccines Launches Vaccines CDMO Site in China
    MilliporeSigma Launches Integrated mRNA Services
    IQVIA Names Richard Staub President of R&D Solutions
    Beauty Packaging

    Latest Breaking News From Beauty Packaging

    Jennifer Coolidge Collaborates with e.l.f. Cosmetics for 'Dirty Pillows' Lip Collection
    Victoria Beckham Beauty Introduces First Fragrance Collection
    Voloom Taps Julius Michael as Brand Ambassador
    Happi

    Latest Breaking News From Happi

    Extracts-Unlimited Attains Organic Certification
    The Kline Group Breaks Down the Unbreakable Bonding Market
    ACI Welcomes Ana Fraisse as Manager, Sustainability Engagement
    Ink World

    Latest Breaking News From Ink World

    Sapphire Ink – SB Eco Series Receives Oeko-Tex Eco Passport ZDHC Level 3 Certification
    Flint Group Digital with Xeikon Present at FEFCO Technical Seminar
    R.E. Carroll Inc. Packs, Donates 400 Backpacks to Students
    Label & Narrow Web

    Latest Breaking News From Label & Narrow Web

    Bobst to 'unwrap the future of flexible packaging' at open house
    IDENTCO brings new automated wire marking system to Mexico
    Maan Engineering chooses Vetaphone for linerless labels
    Nonwovens Industry

    Latest Breaking News From Nonwovens Industry

    Ana Fraisse Joins The American Cleaning Institute
    Weekly Recap: Soft N' Dry Seeks to Expand Private Label Roll Out, Albis Completes Work on Line
    Lenzing Earns EU Ecolabel at Indonesian Plant
    Orthopedic Design & Technology

    Latest Breaking News From Orthopedic Design & Technology

    Abyrx's MONTAGE Settable Bone Putty Cleared for Cardiothoracic Surgery
    Theradaptive Receives DOD Clinical Trial Award of Up to $7.4 Million
    Saluda Medical's Evoke Spinal Cord Stimulation OK'ed for MRI Scans
    Printed Electronics Now

    Latest Breaking News From Printed Electronics Now

    Nhat Tin Logistics Enhances Operations with Zebra Technologies
    Nedap Teams with Foot Locker to Extend RFID Project
    Epishine Welcomes New CEO Anders Kottenauer

    Copyright © 2023 Rodman Media. All rights reserved. Use of this constitutes acceptance of our privacy policy The material on this site may not be reproduced, distributed, transmitted, or otherwise used, except with the prior written permission of Rodman Media.

    AD BLOCKER DETECTED

    Our website is made possible by displaying online advertisements to our visitors.
    Please consider supporting us by disabling your ad blocker.


    FREE SUBSCRIPTION Already a subscriber? Login