Sherwin to Acquire German Wood Coatings Companies
Global coatings manufacturer The Sherwin-Williams Company recently announced plans to acquire German-based Specialized Industrial Coatings Holding (SIC Holding), a Peter Möhrle Holding and GP Capital UG venture comprising Oskar Nolte GmbH and Klumpp Coatings GmbH.
The coatings companies’ portfolio of solutions includes foil coatings as well as radiation-cured and water-based coatings for the board, furniture and flooring industry. Oskar Nolte GmbH and Klumpp Coatings GmbH employ approximately 220 employees and are reported to make more than 91.5 million euros ($96.4 million) in annual sales.
Combined, the coatings companies have a presence in Europe, Asia and South America.
Per Sherwin-Williams’ press release issued last month, the companies are expected to become part of the Sherwin-Williams Performance Coatings Group reportable segment.
“This acquisition creates opportunities to accelerate our profitable growth in the global industrial wood market and fits our strategy of acquiring complementary, high-quality and differentiated businesses,” said Sherwin-Williams Chairman and Chief Executive Officer, John G. Morikis.
“The company's extensive offerings include unique and innovative foil coatings, which provide us with access to another adjacent growth market where Sherwin-Williams has not participated previously. We are excited by Oskar Nolte's and Klumpp Coatings' strong technical and commercial teams, excellent relationships with multi-national and local customers, strategically-located manufacturing, and key specification and approval positions, all of which we will leverage further throughout Europe and beyond. We look forward to welcoming the talented employees of these businesses to the Sherwin-Williams family upon the close of the transaction.”
The transaction is expected to close by early 2023, pending customary regulatory approvals.
“Today's announcement further demonstrates our ongoing commitment to creating shareholder value through our consistent and balanced capital allocation strategy,” added Morikis. “Through the first nine months of 2022, we have invested approximately $191 million in core capital expenditures largely aimed at growth initiatives, deployed approximately $630 million for acquisitions, and returned just over $1.2 billion to shareholders in the form of dividends and share buybacks. We expect to continue our approach supported by our strong ongoing cash generation.”
Recent Acquisitions, Expansion
In October, Sherwin-Williams announced plans to acquire an Italian designer, manufacturer and distributor of industrial wood coatings.
Products made by Industria Chimica Adriatica S.p.A. (ICA) are used for kitchen cabinets, furniture and décor, building products, flooring and other specialty applications. According to Sherwin, the acquired business has annual sales of more than 150 million euros ($147.1 million) and employs approximately 600 workers.
ICA also conducts sales and operations globally, with production facilities in Italy and Poland, and is noted to have an interest in the India-based joint venture, ICA Pidilite.
The acquisition is expected to reach completion by the end of 2022. Upon finalization, ICA will become part of the Sherwin-Williams Performance Coatings Group operating segment.
That same month, Sherwin-Williams hosted a ceremonial groundbreaking to expand its manufacturing and distribution facilities in Statesville, North Carolina.
The ceremony, which was hosted on Oct. 26, was attended by various state, county and local public officials and Sherwin-Williams employees, in addition to project contractors and partners.
The project intends to build an additional 36,000 square feet of space to its existing 200,000-square-foot facility. Construction efforts will also involve the construction of a new 800,000-square-foot distribution and fleet transportation center, in addition to four new rail spurs at the existing manufacturing site.
Another 200,000 square feet of space is still available and could potentially be used for additional expansions at the distribution site in the future.
Sherwin-Williams will receive approximately $30 million in state, county and local government incentives toward the project. The funding is noted to reflect the strength of the public-private partnership between Sherwin-Williams and the state of North Carolina, Iredell County and the City of Statesville and underscores the company’s confidence in the region and its people.
The project is expected to reach competition in 2024.