PPG Industries is to sell its automotive original equipment manufacture (OEM) glass and automotive replacement glass (ARG) and services businesses to Platinum Equity of Beverly Hills, California for a…
PPG Industries is to sell its automotive original equipment manufacture (OEM) glass and automotive replacement glass (ARG) and services businesses to Platinum Equity of Beverly Hills, California for approximately USD 500 million before minority interest. The transaction is expected to result in a slight book gain upon closing and charges to income totaling USD 0.20 to USD 0.25 per share to be recorded over the next few quarters. Under the terms of the deal, an affiliate of Platinum Equity will acquire the assets of the businesses. Completion of the transaction is expected in the 4Q 2007 and is subject to customary closing conditions, including receipt of required regulatory approvals. “This transaction is a significant milestone in PPG“s continued transformation to focus on coatings and specialty products, and it will significantly reduce PPG“s exposure to the US automotive market”, said Charles E. Bunch, PPG chairman and chief executive officer. “This sale will also provide us with more resources to pursue profitable growth in coatings, aerospace, optical products and opportunities in Asia”. Mr. Bunch added that the divestiture puts the auto glass businesses in a better position to compete by providing a strong platform from which it can maximize profitable growth. “Moving ahead,” he noted, “we will continue the strategic review our portfolio of businesses with the ongoing objectives of maximizing profitable growth, cash generation and shareholder value”. The automotive OEM glass business unit supplies windshields, rear and side windows, sunroofs and assemblies for auto and truck manufacturers. The ARG and services business unit supplies and distributes replacement automotive glass products for use in the aftermarket. It also provides insurance claim services through its LYNX Services subsidiary, glass management software through its GTS subsidiary, and e-business solutions through its GLAXIS subsidiary. The automotive glass businesses manufacture and fabricate automotive glass products at nine North American plants located in Berea, Kentucky; Creighton, Meadville and Tipton, Pennsylvania; Crestline, Ohio; Evansville, Indiana; Evart, Michigan; and Hawkesbury and Oshawa, Ontario, Canada. In addition, there are nine satellite parts assembly plants, and there are LYNX Services claims management centers in Fort Myers, Florida, and Paducah, Kentucky. The aggregate workforce is approximately 4,400 people.