Blog Coverage PPG Sells the Plaka Business to Knauf
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LONDON, UK / ACCESSWIRE / December 30, 2016 / Active Wall St. blog coverage looks at the headline from PPG Industries, Inc. (NYSE: PPG) as the Company announced on December 23, 2016, that it has entered into a definitive agreement with Knauf International GmbH to sell the assets of Plaka plasterboard and cement-board business. PPG acquired the Plaka business in 2014 as part of its acquisition of Comex, S.A. de C.V. Plaka reportedly generated sales of $30 million for FY15. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.
One of PPG Industries' competitors within the Specialty Chemicals space, LyondellBasell Industries N.V. (NYSE: LYB), is expected to report earnings on February 03, 2017 before market open. AWS will be initiating a research report on LyondellBasell Industries in the coming days.
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Knauf is one of the leading manufacturers of insulation materials, plasters and accessories, thermal insulation, paints, floor systems and construction equipment and tools. The firm executes operations across 150 production facilities and sales organizations spanning across 60 countries. Knauf employs more than 26,000 employees worldwide with reported sales of €6.27 billion for FY13.
PPG Industries is a leading manufacturer of specialty materials and glass products. The firm operates through three business segments, namely:
Performance Coating
Industrial Coatings
Glass
PPG is a Fortune 200 company, headquartered in Pittsburgh and has a pan-world presence across 70 countries. The firm generated net sales of approximately $14.8 billion for FY15.
Breaking down the agreement
PPG acquired the Plaka business as a part of the agreement to acquire the leading Mexican paint company for $2.3 billion. Plaka business employs about 200 employees and operates a manufacturing plant in Queretaro, Mexico. Plaka manufactures plasterboard, cement board, and drywall primarily for the Mexican construction market. This transaction is viewed as a portfolio transformation action for PPG.
PPG swung into a loss on a reported basis for Q3 2016, owing to pension settlement charges. With the execution of this agreement and two other agreements facilitated in October 2016, the firm expects to generate approximately $120 million-$130 million in annual savings along with $40 million-$50 million for 2017. PPG expects global demand to elevate and the number of projects to rise, hence, rallying its earnings growth for Q4 2016, projecting it to be equal or higher than that of the third quarter.
Sale of PFG joint ventures
This sale-off from PPG comes in the close vicinity of the sale of 50% ownership interest in two PFG Fibre Glass joint ventures to Nan Ya Plastics Corp. Executed for a reported $170 million, the transaction closed on November 18, 2016. Nan Ya owned the remaining 50% stake in PFG prior to the execution of this transaction. PPG executed the transaction in an attempt to minimize losses it had incurred for FY15, and hence, minimizing costs to compete in the end-markets.
Stock Performance
On Thursday, the stock closed the trading session at $95.31, marginally up 0.68% from its previous closing price of $94.67. A total volume of 1.15 million shares have exchanged hands. The company's shares are trading at a PE ratio of 32.04 and have a dividend yield of 1.68%. The stock currently has a market cap of $25.24 billion.
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