Independent PPG paint retailers breathed a collective sigh of relief last week when the company announced the sale of their beleaguered architectural coatings division to American Industrial Partners (AIP), an “operationally-oriented middle market private equity firm” according to that company’s website.
And considering our recent experience with private equity, that relief says a lot about current PPG management!
American Industrial Partners will pay PPG $550 million for the division incliding its manufacturing facilities and a cacophony of brands sold through independent retailers, company owned stores and home centers.
And almost all the employees.
The final price ended up being 60% lower than bids PPG received and billions below PPG’s investment in the segment. That decrease likely occurred during the due diligence process, no surprise considering the values PPG management was imputing to prospective buyers.
Values I found more optimistic than realistic, though some had a different take.
In announcing the agreement PPG chief executive Tim Knavish thanked employees of the US and Canadian-based division for their “dedication and commitment.” Traits Knavish himself did not reflect when just sentences later he announced the termination of the 1,800 employees not included in the deal.
Employees whose health insurance will run out in 30-days, just enough time for Knavish to count the trifling millions remaining from his company’s multi-billion-dollar arch coatings abomination.
If you’re one of those 1,800 employees, you know what to do!
THE Waiting Game
Once the deal closes I’m sure dealers will hear from AIP regarding their intentions for the brands; until then dealers are left to ponder their limbo.
Unstressed though, believing that this may be THE one time you choose the devil you don’t know!
PPG was not the only paint manufacturer to make news last week. True Value Hardware, owner of True Value Paint Manufacturing, filed for bankruptcy last week simultaneously announcing that Do it Best had made a $153 million stalking horse bid to buy the ailing cooperative.
While the name True Value Paint Manufacturing–also known as General Paint Manufacturing–is not household in our parlance their bankruptcy retains significance. If only for the company’s manufacturing capacity. Capacity which Do it Best CEO Dan Starr is unlikely to waste.
Not to be outdone, last week executives at Miller Paint asked the employee-owners of that company for permission to merge with Rodda Paint. With stores and dealers throughout the Pacific Northwest and Alaska, Rodda is a wholly-owned subsidiary of Canada’s largest paint retailer Cloverdale Paints.
I’m Available!
For the 12th time in baseball’s history the New York Yankees will play the formerly Brooklyn and now Los Angelos Dodgers in baseball’s World Series.
Yankees-Dodgers pits the country’s two largest television markets in the World Series, a home run for baseball. Add in marque some players and this year’s Yankees-Dodgers is a grand slam!
Leading the Dodgers will be Shohei Ohtani, arguably the greatest player in baseball history and the only notable two-way player to reach the major leagues since Babe Ruth.
But unable to pitch this season due to injury Ohtani focused on his offense and in the process established baseball’s 50-50 club: THE only player to ever hit 50 home runs and steal 50 bases during one baseball season.
The Yankees are led by center fielder Aaron Judge who this season batted .322 while swatting 58 dingers and collecting 144 runs batted in, besting the league in those last two categories and likely earning Judge his second MVP Award.
In seven games, we’ll know which team is best. Six if I get lucky!
With better starting pitching, a resurgent bullpen and batting order hitting their stride at just the right time I’m picking the Yankees to bring home their first championship trophy since A-Rod and his roids!
Despite my optimism, betting lines favor the Dodgers to win, good news for Yankee fans trying to make a buck while their team chases its 28th World Championship.
And let's hope they win it in six.
