Equity Comments on PPG Acquisition; Industry Reacts to News
PPG Industries announced late yesterday that it has signed an
agreement with Platinum Equity in Beverly Hills, Calif., to sell
its automotive original equipment manufacture (OEM) glass and automotive
replacement glass (ARG) and services businesses for approximately
$500 million. glassBYTEs.com™ reported earlier this week that there
was a possibility the businesses would be sold to a private equity
firm, and this speculation proved to be correct.
Platinum Equity says it focuses on "business continuity as one
of the most critical measures of a successful transition," according
to its website. It also says it aims to provide uninterrupted customer
service, minimal employee uncertainty and preservation of the seller's
brand reputation. "Our ability to maintain business continuity through
transition is what allows us to pursue deals that pure financial
buyers might forego," the company says.
Platinum owns a number of companies from a variety of industries
including the automotive aftermarket industry (American Racing Equipment),
chemical manufacturing, communications equipment and services and
telecommunication services (which comprises the largest part of
its portfolio), industrials, logistics services, pharmaceutical
marketing services, professional turf care, software, steel services,
supply chain management solutions and transportation services. The
company was founded in 1995 by chairman and chief executive officer
Company spokesperson Mark Barnhill told glassBYTEs.com™/AGRR
magazine that it is too early to discuss the details of the acquisition
by Platinum Equity, since the transaction is not yet complete.
"We've signed a definitive agreement to buy the business … the
transaction is not complete yet," he says. "It's premature for us
to talk about the business and what we're going to do with it."
He adds that Platinum cannot disclose much since PPG is a publicly
"It is a publicly owned company and we must follow the rules of
disclosure that accompany the nature of a publicly owned business,"
Barnhill does not expect the completion of the sale to take long,
"I think we'll be in a position to talk to you with in a few weeks
when the sale is final," he says.
PPG spokesperson Betsy Bialosky could not be reached for comment
It had been rumored in recent months that other possible purchasers
included Auburn, Mich.-based Guardian Industries. A source familiar
with PPG who wished to remain anonymous says he suspects the alleged
Guardian deal may have fallen through due to union issuesthough
he notes this is pure speculation.
"Assuming they were talking to Guardian and that fell through,
I'm going to guess, and this is strictly speculation, that maybe
it had something to do with the union contracts," he says.
Ian Graham of Windshield Solutions in Cloverdale, Va., says this
news didn't come as much of a shock to him.
"I wasn't a bit surprised. It's exactly what I expected," he says.
"I think it would have been a bit more exciting had it been sold
to an industry player, but the private equity firm is exactly what
Dave Hackett of Premier Auto Glass in Waukesha, Wis., agrees.
"I was surprised earlier when the news first came out that PPG
was looking for a buyer, but now that they have sold I am not at
all surprised an equity firm purchased them," Hackett says. "The
question now is, how long will Platinum Equity hang on before selling
The question Hackett asks is one on the minds of many industry
professionals. If the company does sell off the business, or portions
of the business, it could have more of an effect than the current
"As far as what effect it will have on my business I don't expect
it to have much of an effect at all at the moment because nothing
will change right away," says Graham. "The private equity firm will
begin to trim whatever fat it can find and then most likely split
the company up into pieces and sell it off. That's what private
equity firms do after all."
Hackett says an inside source told him he doesn't have anything
to worry aboutat least in his area.
"I feel at this juncture it will have no effect on our business
unless PPG moved out of our market," he says. "After speaking with
one of their regional reps (whom I have known for almost 20 years),
there is no anxiety or feeling that they will move out or close
here. Other markets? That's anybody's guess."
No matter what, most agree the story's not complete yet.
"There is no doubt changes are ahead," says Neil Duffy of Auto
Glass Menders in San Jose, Calif. "Platinum may have a buyer for
one or more segments in the wings waiting. Platinum may wait, reduce
expenses and sell off much later."
HERE to read the official press release from PPG announcing
the sale of the business.
HERE to read Russ Corsi's recent Off the Line column from AGRR
magazine discussing the impending sale.
HERE to read coverage of the story from the Pittsburgh Tribune-Review.
HERE to read coverage of the story from the Meadville Tribune.
HERE to read the full text of a letter written by PPG chair
Charles Bunch regarding the sale.
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