Pittsburgh-based PPG announced it has sold 100 percent of its U.S. and Canadian architectural coatings business to American Industrial Partners for $550 million.
The transaction will include the leased headquarter offices for leadership and administrative teams in Cranberry, Pennsylvania, as well as the distribution center in Reading, Pennsylvania, as well as manufacturing, distribution centers and points of sale across the two countries.
The company said its architectural coatings businesses in other parts of the world, including Latin America, Europe and Asia Pacific, will remain part of its core businesses. In a number of key countries, PPG holds a strong #1 or #2 position in the architectural coating market.
“We are pleased to complete this transaction with American Industrial Partners, and I want to thank the architectural coatings U.S. and Canada employees for their dedication and commitment to the business and to PPG customers throughout the years,” said Tim Knavish, PPG chairman and chief executive officer. “This transaction, along with the completed sale of our silicas products business, further optimizes our portfolio by improving our organic growth and financial return profiles and will result in increased capability to channel our growth resources to areas where we have the strongest right to win with our customers.”
The architectural coatings business in the U.S. and Canada represent about $2 billion in PPG’s 2023 sales, the company said, with a low single-digit EBITDA margin. Officials said the company’s on a 3-year pro forma basis, overall sales volume would have improved by 200 points excluding this business. Additionally, the company’s Performance Coatings segment operation income, excluding the U.S. and Canadian architectural coatings and the associated growth-related investments the company made, would have resulted in an approximately 300 basis point improvement in segment margins last year.