Coatings giant PPG Industries’ ( PPG) North American architectural coatings business has agreed to buy decorative wall and ceiling texture repair products supplier – The Homax Group – for an undisclosed price. The transaction, which is subject to customary closing conditions, is expected to consummate in third-quarter 2014.
Homax, a portfolio company of private equity firm Olympus Partner, is a leading supplier of decorative aerosol drywall and ceiling texturing applications used mainly for home repair. It also supplies a number of epoxy finishes, patching, caulking and mesh tape repair products. The entity distributes its products through major home improvement centers, hardware stores and paint suppliers.
The addition of Homax’s offerings will strengthen PPG Industries’ architectural coatings product portfolio. The acquisition complements the company’s commitment in offering its customers with leading coatings and related home remodeling and repair products.
PPG Industries is taking steps to grow its business inorganically by making a number of acquisitions. The acquisition of Akzo Nobel’s ( AKZOY) North American architectural coatings business has reinforced its branded paint product offerings and scale in the North American architectural paint market.
Moreover, in an effort to strengthen its position in the aerospace industry, PPG Industries acquired specific assets of privately-held specialty coatings company Deft Incorporated last year. The recent acquisition of Hi-Temp Coatings Technology also strengthened PPG Industries’ protective and marine coatings business.
PPG Industries has a diversified base of products and markets, and looks to grow its businesses strategically along with controlling costs. It should gain from continued strength across North American automotive and aerospace markets. However, the company remains exposed to a still soft European market, raw material cost pressure and currency headwind. .
PPG Industries is a Zacks Rank #3 (Hold) stock.
Other companies in the chemical space worth considering include Compass Minerals International Inc. ( CMP) and PetroLogistics LP ( PDH). While Compass Minerals retains a Zacks Rank #1 (Strong Buy), PetroLogistics sports a Zacks Rank #2 (Buy).