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PPG Acquires Ennis-Flint, Expands Mobility Technologies

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PPG Industries, Inc. (PPG - Free Report) announced that it is set to acquire Ennis-Flint, a global manufacturer of coatings. Ennis-Flint has a broad portfolio of pavement marking products, including paint, thermoplastics and other advanced traffic technologies.

The deal, valued at roughly $1.15 billion, is expected to be completed within the next few months, subject to customary closing conditions.

This acquisition will help PPG expand its product portfolio and broaden opportunities in rapidly developing and high-growth mobility technology solutions. It looks forward to leverage Ennis-Flint’s high-quality products, technical expertise and innovative systems. PPG expects Ennis-Flint’s products to further enhance its existing mobility technologies and also looks forward to working together to expand its product distribution on a global scale.

Ennis-Flint has a broad product offering and employs around 1,000 people globally. Its annual revenues for 2020 are expected to be around $600 million, with mid-teen percentage EBITDA margins. Its products and technologies are excellent complements to PPG’s current product portfolio. Also, Ennis-Flint can benefit from PPG’s innovative and broad geographic footprint that will provide more growth opportunities for its products and employees.

Shares of PPG Industries have gained 14.2% over a year compared with 10.5% rise of its industry.

 

PPG Industries is actively managing costs amid a challenging environment due to the coronavirus pandemic. The company is expecting restructuring savings of $30-$35 million for the last quarter of 2020. Moreover, the company expects corporate expenses of $55-$60 million and net interest expense of $28-$30 million for the fourth quarter. Sales volume for the quarter is also expected to be down low-to-mid-single digit percentage, differing by region and business.

PPG Industries, Inc. Price and Consensus

 

PPG Industries, Inc. Price and Consensus

PPG Industries, Inc. price-consensus-chart | PPG Industries, Inc. Quote

 

Zacks Rank and Other Key Picks

PPG Industries currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks worth considering in the basic materials space are Bunge Limited (BG - Free Report) , Silvercorp Metals Inc. (SVM - Free Report) , and Pretium Resources Inc. .

Bunge has a projected earnings growth rate of 43% for the current year. The company’s shares have gained around 10% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Silvercorp has an expected earnings growth rate of 40% for the current year. The company’s shares have rallied around 18% in the past year. It currently carries a Zacks Rank #2.

Pretium Resources has an expected earnings growth rate of 25.5% for the current year. The company’s shares have gained around 10% in the past year. It currently carries a Zacks Rank #2.

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