Axalta Coating Systems has announced that it will acquire U-POL Holdings Limited from Graphite Capital Management LLP and other holders for £428m ($590m) subject to certain adjustments in the Sale and Purchase Agreements.
Founded in 1948, the UK-based U-POL is a manufacturer of repair and refinish products used primarily for automotive refinish and aftermarket protective applications. The business produces a wide range of high-quality automotive refinishing products and accessories including fillers, coatings, aerosols, adhesives, and paint related products as well as automotive aftermarket protective coatings.
U-POL sells its products in over 100 countries and is widely known for its leading brands, including Raptor, Dolphin, and Gol, among others. Axalta will accelerate growth of U-POL’s products by expanding market access through Axalta’s existing sales and distribution channels while leveraging U-POL’s distribution channels to extend the reach of its Refinish Coatings portfolio to new customers.
“Axalta is the world leader in the premium refinish coatings segment. U-POL’s expertise in refinish accessories and protective coatings is highly complementary to Axalta’s business and expands our addressable market into the important and growing mainstream and economy-based refinish segment as well as the consumer do-it-yourself aftermarket,” said Robert Bryant, Axalta’s Chief Executive Officer. “We also see opportunities for U-POL’s technology in whitespace applications for other areas of our business, including Mobility and Industrial Coatings.”
U-POL’s talented global organisation and its manufacturing plant and R&D lab in Wellingborough, England, bring important capabilities to the company’s commercial, manufacturing, and technology organisations, enhancing Axalta’s ability to serve its customers across the globe.
“The two companies’ cultures of innovation, quality, and strong operating principles are exceptionally aligned,” said Troy Weaver, Axalta’s Senior Vice President, Global Refinish Coatings. “We look forward to serving customers with these additional capabilities and to welcoming U-POL’s dedicated team members to the Axalta family.”
U-POL expects net sales of approximately $145m and adjusted EBITDA of approximately $38m for fiscal year 2021. Axalta expects to realise annual operating synergies and efficiencies of approximately $10m within 18 to 24 months of close. The total consideration of approximately $590m reflects a full year 2021E adjusted EBITDA multiple of approximately 12.5 times, including run rate operating synergies and efficiencies. Additionally, the identified commercial synergy opportunities are expected to create significant value over time. Axalta expects the acquisition to be immediately accretive to adjusted EBITDA margin, excluding transaction-related costs associated with the acquisition.
Axalta plans to finance the transaction from cash on hand, and the transaction is expected to close in the second half of 2021, subject to clearance under applicable antitrust laws and other customary closing requirements.