US PPG to acquire Mexico coatings firm Comex for $2.3bn

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LONDON (ICIS)–PPG Industries is to acquire Mexican coatings firm Consorcio Comex in a deal valued at $2.3bn, the US-based firm said on Monday.

“The acquisition is very complementary to PPG as it adds a leading architectural coatings business in Mexico and Central America, a region where we have negligible architectural coatings presence,” said PPG’s chairman and CEO Charles Bunch.

Mexico City-based Comex makes coatings and related products which it sells through around 3,600 independently owned stores.

The privately held company, which employs around 3,900 people, had sales of approximately $1bn in 2013. It has eight manufacturing facilities and six distribution centres.

PPG, a coatings and specialty materials firm, will primarily fund the acquisition using currently held cash and short-term investments but may fund a portion through the addition of debt, Bunch said.

Excluding non-recurring acquisition-related costs, the deal will be immediately accretive to earnings, he added, with the company anticipating acquisition-related synergies of 3% to 4% of acquired sales to be achieved over a two-year period.

Marcos Achar Levy, CEO of Comex, said: “Being part of PPG gives us new opportunities and synergies that will allow us to continue to significantly grow in our markets.”

The transaction is subject to regulatory approvals and customary closing conditions.

Earlier, another paints-and-coatings producer, Sherwin-Williams, had attempted to acquire Comex in November 2012 for $2.34bn.

In July 2013, Mexico’s federal competition commission rejected the deal in a 3-2 vote.

Earlier this year, Comex sought damages regarding the failed deal through the International Chamber of Commerce.

Additional reporting by Al Greenwood