The Sherwin-Williams Company
to Acquire Valspar for $11.3 Billion
The Sherwin-Williams Company and
The Valspar Corporation have entered
into a definitive agreement under which
Sherwin-Williams will acquire Valspar
for $113 per share in an all-cash transaction, or an enterprise value of approximately $11.3 billion. At $113 per
share, the transaction, which has been
unanimously approved by the Boards of
Directors of both companies, represents
a premium of approximately 41 percent
to Valspar’s volume weighted average
price for the 30 days up to and including
March 18, 2016.
Sherwin-Williams and Valspar have
highly complementary paints and coatings offerings and this combination enhances Sherwin-Williams position as a
premier global paints and coatings pro-vider. The transaction results in an exceptional, diversified array of strong brands
and technologies, accelerates Sherwin-Williams growth strategy by expanding
its global platform in Asia-Pacific and
EMEA, and also adds new capabilities
in the packaging and coil segments. The
combined company would have pro forma 2015 Revenues and Adjusted EBITDA
of approximately $15.6 billion and $2.8
billion with about 58,000 employees.
John G. Morikis, president and
chief executive officer of The Sherwin-
Williams Company, said, “Valspar is
an excellent strategic fit with Sherwin-
Williams. The combination expands
our brand portfolio and customer rela-
tionships in North America, significantly
strengthens our Global Finishes business,
and extends our capabilities into new ge-
ographies and applications, including a
scale platform to grow in Asia-Pacific and
EMEA. Customers of both companies
will benefit from our increased product
range, enhanced technology and inno-
vation capabilities, and the transaction’s
clearly defined cost synergies. We have
tremendous respect for the expertise and
dedication of the Valspar team and we are
excited about the opportunities that this
combination will provide to both com-
panies’ employees. Sherwin-Williams
will continue to be headquartered in
Cleveland and we intend to maintain a
significant presence in Minneapolis.”
Morikis added: “Sherwin-Williams
has a long track record of successfully
integrating acquisitions. We are highly
confident in the industrial logic of the
transaction and, once closed, our ability
to achieve $280 million of estimated an-
nual synergies in the areas of sourcing,
SG&A and process and efficiency savings
within two years and our long-term an-
nual synergy target of $320 million. We
expect this transaction to be immediately
accretive excluding one-time costs and
meaningfully enhance our cash flow gen-
eration profile.”
Gary E. Hendrickson, chairman
and chief executive officer of Valspar,
said, “We are pleased to announce this
compelling transaction, which deliv-
ers immediate and certain cash value
to our stockholders. We believe that
Sherwin-Williams is the right partner
to utilize our array of brands and cre-
ate a premier global coatings company.
The combination of Sherwin-Williams
and Valspar will benefit our customers,
employees and other stakeholders. We
are confident this transaction will create
opportunities to accelerate many of the
operating initiatives already underway at
Valspar. We look forward to positioning
Valspar to enter its next phase of growth
and success and to working closely with
Sherwin-Williams to seamlessly close this
transaction. Together we will continue to
build on the solid momentum our team
has worked so hard to create.”
The transaction is expected to close
by the end of Q1 2017, and is subject to
the approval of Valspar shareholders and
customary closing conditions, including
the expiration or termination of the appli-
cable waiting period under the U.S. Hart-
Scott-Rodino Antitrust Improvements
Act and regulatory approvals in various
other jurisdictions. CW
Index to Companies
This index gives the starting page for a department or feature with a significant reference to a manufacturer of paint, coatings, adhesives and sealants
Subsidiaries are indexed under their own names.
AkzoNobel........................................................................................... 10, 30, 34
Axalta Coating Systems................................................................................... 10
Behr ................................................................................................................ 10
Benjamin Moore ....................................................................................... 10. 42
Dunn Edwards ................................................................................................ 42
Hardide Coatings ............................................................................................ 10
Hempel ........................................................................................................... 36
Jotun ......................................................................................................... 10, 30
PPG.......................................................................................... 10, 30, 36, 42, 66
Russian Paint .................................................................................................. 36
Rust-Oleum..................................................................................................... 10
Sherwin-Williams ...................................................................................8, 10, 42
Sika ................................................................................................................. 10
Sinteplast......................................................................................................... 32
TCI Powder Coatings...................................................................................... 10
Valspar .............................................................................................................. 8
