PPG Industries Inc. (PPG) along with its subsidiary PPG Colombia, acquired Colpisa Colombiana de Pinturas and its affiliates, including Colpisa Ecuador for an undisclosed amount. The transaction is expected to be closed by March 2012.
Based in Itagüí, Colpisa is engaged in the manufacture and distribution of coatings for automotive original equipment manufacturers and refinish, and architectural coatings. Its facility has 400 employees and the company has worked with PPG automotive since 1996.
By acquiring Colpisa, PPG expects to build a successful relationship and gain the opportunity to expand its coatings presence in Colombia to directly serve and grow with automotive manufacturer.
Earlier in May, PPG announced its plans to acquire European coatings company Dyrup A/S for $200 million. In March, the company bought Washington-based chlor-alkali company Equa-Chlor for an undisclosed amount.
On July 21, 2011, PPG announced its second-quarter 2011 results. Net income was $340 million or $2.12 per share compared with $272 million or $1.63 per share in the year-ago quarter. The results were at par with the Zacks Consensus Estimate.
Net sales in the quarter were $4.0 billion, up 15% from $3.5 billion in the second quarter of 2010. It also outperformed the Zacks Consensus Estimate of $3.8 billion. The improvement was attributed 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.
PPG Industries had cash and cash equivalents worth $982 million as of June 30, 2011 compared with $784 million as of June 30, 2010. Total debt was $3.61 billion as of June 30, 2011 compared with $3.02 billion as of June 30, 2010. Inventories at the end of the quarter amounted to $1.82 billion versus $1.54 billion as of June 30, 2010.
PPG Industries has a Zacks #1 Rank ('Strong Buy') in the short term and we hold a long-term Neutral recommendation on the stock.
PPG faces stiff competition from the DuPont Performance Coatings segment of EI DuPont de Nemours & Co. (DD) and BASF Coatings AG.
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