PPG Industries Inc.(PPG) completed the acquisition of Denmark based European coatings company Dyrup A/S from Monberg & Thorsen, for €115 million ($150 million). The deal was previously announced in May 2011.
Dyrup is engaged in manufacturing architectural coatings and specialty products and generated revenue of $270 million in 2010. Dyrup, which manufactures Bondex, Gori and Xylophene, has six factories and 950 employees.
The buyout of Dyrup will enable PPG to continue to expand its geographic reach within Europe, as well as expand its product portfolio by including Dyrup's established strong brands, particularly in wood care products. Dyrup and PPG represent a strong strategic combination with possibilities for further growth and synergies.
In October 2011, the company released its third-quarter 2011 results. The company posted net income of $311 million or $1.96 per share for the third quarter of 2011 compared with $262 million or $1.58 in the year-ago quarter. The results exceeded the Zacks Consensus Estimate by 3 cents.
Net sales for the quarter were $3.8 billion, up 11% from $3.5 billion in the third quarter of 2010. It was almost in line with the Zacks Consensus Estimate of $3.89 billion. The improvement is attributable to demand improvements, higher pricing in each of its coatings businesses, successful cost reduction initiatives and a gradual industrial recovery worldwide, partly offset by rising raw material costs.
Looking ahead, the company expects current macro and regional economic trends to continue, supported by October activity levels in many of its businesses. In general, the company anticipates a normal seasonal fourth quarter.
The company expects to see higher demand in 2011 compared with 2010, but intends to remain focused on continued cost management. Despite the recession, PPG’s cash generation has been consistently at or near record levels for the past three years. A stronger operating focus has resulted in lower operating working capital over the same time period. The strengthening economic recovery, broad geographic footprint, reductions in cost structure and substantial financial flexibility inspire optimism about PPG’s prospects for 2011.
PPG Industries has a short term Zacks #3 Rank ('Hold') and we hold a long-term Neutral recommendation on the stock.
EI DuPont de Nemours & Co.(DD) is also major player in the industry.
DU PONT (EI) DE (DD): Free Stock Analysis Report
PPG INDS INC (PPG): Free Stock Analysis Report
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