Axalta Coating Systems has entered into definitive agreements to acquire U-POL from Graphite Capital Management and other holders for £428m (US$590m), subject to certain adjustments set forth in the Sale and Purchase Agreements for the transaction.
Founded in 1948 and based in the UK, U-POL is a manufacturer of repair and refinish products used primarily for automotive refinish and aftermarket protective applications.
The business produces a range of automotive refinishing products and accessories including fillers, coatings, aerosols, adhesives and paint related products, as well as other automotive aftermarket protective coatings.
U-POL sells its products in more than 100 countries and has brands including Raptor, Dolphin, and Gold, 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.
“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 DIY aftermarket,” said Axalta CEO, Robert Bryant.
“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 global organisation and its manufacturing plant and R&D lab in Wellingborough, England, bring capabilities to the company’s commercial, manufacturing and technology operations.
“The two companies’ cultures of innovation, quality and strong operating principles are aligned,” added Axalta Global Refinish Coatings SVP, Troy Weaver.
“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 around US$145m and adjusted EBITDA of approximately US$38m for fiscal year, 2021. Axalta expects to realise operating and commercial synergies across the combined global businesses.
Expected annual operating synergies and efficiencies of around US$10m are expected to be fully realised within 18 to 24 months of close. The total consideration of US$590m reflects a full year 2021E adjusted EBITDA multiple of approximately 12.5x, including run rate operating synergies and efficiencies.
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.
The transaction is expected to close in the second half of 2021, subject to clearance under applicable antitrust laws and other customary closing requirements.