Axalta Completes Acquisition of U-POL
Last week, global liquid and powder coatings supplier Axalta Coating Systems Ltd. announced that it had completed its acquisition of U-POL Holdings Limited (U-POL) from Graphite Capital Management LLP and other holders.
Reported to be a leading supplier of paint, protective coatings and accessories primarily for the automotive aftermarket, the acquisition of U-POL is expected to strengthen Axalta's global refinish leadership position and supports its broader growth strategy.
“The acquisition of U-POL is another step in Axalta's growth strategy and strengthens our global leadership position in the refinish coatings segment,” said Robert Bryant, Axalta's Chief Executive Officer.
“The addition of U-POL's team, industry expertise, and operations strengthen our capabilities and provide a strong platform for future growth. We'll work to make the integration of U-POL as seamless as possible, while maintaining high levels of service to our customers. I'm pleased to welcome our newest team members to the Axalta family and look forward to all we can accomplish together as one Axalta.”
According to Axalta’s press release, U-POL’s portfolio includes a variety of high-quality automotive refinishing products and accessories including fillers, coatings, aerosols, adhesives and paint-related products, as well as other automotive aftermarket protective coatings.
The addition of these offerings is expected to expand Axalta's market in mainstream and economy refinish segments. Axalta plans to accelerate the growth of U-POL's product portfolios by increasing market access through its existing sales and distribution channels while leveraging U-POL's distribution channels to extend the reach of its refinish coatings portfolio.
Prior to the acquisition, U-POL was selling its products in over 100 countries and is widely known for its leading brands, including Raptor, Dolphin and Gold, among others.
When plans for the acquisition were first announced in July, U-POL was expecting to reach net sales of approximately $145 million and adjusted EBITDA of approximately $38 million for fiscal year 2021. Expected annual operating synergies and efficiencies of approximately $10 million are expected to be fully realized within 18 to 24 months of close.
The total consideration of approximately $590 million reflects a full year 2021 adjusted EBITDA multiple of approximately 12.5x, 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.
At the time, Axalta planned to finance the transaction from cash on hand. While financial details about the final acquisition were not disclosed, at the time of the announcement Axalta was slated to acquire U-POL for 428 million euros (approximately $590 million).
