PPG's planned SigmaKalon buy boosts EPS - bank

20 July 2007 09:33  [Source: ICIS news]

MUMBAI (ICIS news)--Bank of America (BoA) said on Friday PPG Industries’ planned acquisition of Dutch-based coatings producer SigmaKalon for €2.2bn ($3.0bn) would add 10 cents to its estimated 2008 earnings per share (EPS) value and 75 cents to EPS in 2009.

 

"Substantial EPS accretion in 2009 from the SigmaKalon acquisition, which we see as a good strategic fit… support a constructive posture for PPG," BoA said of the proposed acquisition by the US coatings and specialty products company.

 

"Synergies of 3-5% of sales are a bit higher than anticipated, while the product mix improves as specialty content rises to 82% of sales and over 85% of earnings before interest and tax (EBIT)," the bank added.

 

The planned acquisition would also mean lower exposure of PPG to volatility in the car, chlor-alkali and US residential construction markets, it added. 

 

Meanwhile, PPG’s second-quarter operating EPS was in line with forecasts at $1.53, despite a $0.05 hit due to unplanned, transitory plant outages in June, it said.

 

($1 = €0.72)

By: Divya Chowdhury
+65 6780 4359

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