29 July 2013 13:15 [Source: ICIS news]
LONDON (ICIS)--PPG Industries is to sell its majority stake in photochromic lens producer Transitions Optical to joint venture partner Essilor for $1.73bn (€1.3bn), the US-based paints producer said on Monday.
PPG’s decision to sell its 51% stake in the business leaves Essilor with sole ownership of Transitions Optical. The $1.73bn pre-tax cash figure will represent a $1.5bn post-tax gain for the company, subject to certain working capital and net debt adjustments, PPG said.
The transaction is expected to close in the first half of 2014, PPG added. Essilor has also agreed to enter into a multi-year agreement to supply PPG with optical dyes and research and development services, and to acquire the company’s sunglasses lens business.
PPG CEO Charles Bunch said that a portion of the proceeds from the sale could be used to fund merger and acquisition activity in future.
He said: “We intend to redeploy the proceeds from the transaction in a timely manner on core business acquisitions and share repurchases.”
PPG and Essilor had announced plans to change their structure of the joint venture in January this year. The option of PPG to divest its stake had been hinted at, but a scenario where PPG acquired Essilor’s stake was also mooted.
PPG said at the time that Transitions Optical accounted for a significant portion of the sales and earnings of its optical and specialty materials segment in 2012. The lens producer posted $800m in sales during the year.
($1 = €0.75)
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