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PPG to Enrich Portfolio on Arsonsisi's Powder Coating Unit Buyout
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PPG Industries, Inc. (PPG - Free Report) recently inked an agreement to acquire the powder coatings manufacturing division of Arsonsisi. The buyout is anticipated to close in the first quarter of 2022 and the financial terms of the deal are still under the wraps.
Powder coatings are one of the rapidly growing coating technologies due to their sustainability benefits, increased durability, transfer efficiency and other stellar performance functionalities. Powder coatings do not emit solvents, given their low-VOC nature and can be reclaimed or reused during application.
Based in Italy, Arsonsisi is an industrial coatings company and is a leading supplier of specialty powder coatings for the architectural and industrial markets. In 2021, the Arsonsisi powder business generated sales of roughly $15 million.
Per the terms of the deal, PPG will takeover Arsonsisi’s highly automated powder manufacturing facility in Verbania, Italy, which can make both small and large batches.
The acquisition, when completed, will enable PPG to rev up its powder coatings product portfolio in the Europe, Middle East and Africa (EMEA) region. The product menu will be enhanced to include metallic bonding, which is one of the most flourishing markets for powder coatings, being used in specialty finishes for automotive, appliance and general industrial applications.
PPG is highly optimistic about this acquisition. In its perpetual commitment to sustainable innovations that exceed customer needs, PPG is investing in powder capabilities globally and this latest acquisition is in sync with the company’s goal to achieve 40% of its sales from sustainably advantaged products by 2025. The inclusion of this business will boost PPG’s sustainable coatings capability and offer its EMEA customers expanded powder coating options to cater to the surging demand for these sustainable coatings.
Having set a strong foothold as an innovator in powder coatings, PPG has always showcased its leadership through powder advancements, including edge coverage and fluoroethylene vinyl ether (FEVE) fluoropolymer coatings for architectural metals. In fact, this Pennsylvania-based paints giant is the only comprehensive solution provider that can supply and service high-performance powder and all other coatings technologies.
Shares of PPG have gained 9% in the past year compared with a 7.1% rise of the industry.
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The company, in its last earnings call, stated that while it expects demand to remain strong, it anticipates the ongoing supply-chain crisis to continue throughout the first quarter of 2022, affecting its ability to manufacture and deliver products. It also expects raw material cost inflation to persist along with higher logistics and labor costs.
PPG projects earnings per share (EPS) between 84 cents and $1.02 for first-quarter 2022. Adjusted EPS are expected in the range of $1.02-$1.20, excluding amortization expenses of 14 cents and costs related to earlier approved and communicated business restructuring of 4 cents.
This Zacks Rank #4 (Sell) company also expects aggregate net sales volumes to be down a mid-single-digit percentage on a year-over-year basis for first-quarter 2022. The corporate expenses are projected to be around $70 million.
Stocks Worth Considering
Some better-ranked stocks in the basic materials space include Albemarle Corporation (ALB - Free Report) , Commercial Metals Company (CMC - Free Report) and AdvanSix Inc. (ASIX - Free Report) .
Albemarle, currently sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 51.5% for 2022. The Zacks Consensus Estimate for Albemarle’s 2022 earnings has been revised upward by 32 cents in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 22.1%. ALB has rallied around 36.1% in a year.
Commercial Metals, flaunting a Zacks Rank #1, has a projected earnings growth rate of 62% for the current fiscal year. The consensus estimate for Commercial Metals’ current fiscal-year earnings has been revised upward by $1.62 in the past 60 days.
Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters, missing once. It has a trailing four-quarter earnings surprise of 13.1%, on average. CMC has rallied around 31.4% in a year.
AdvanSix has a projected earnings growth rate of 7.9% for 2022. The Zacks Consensus Estimate for AdvanSix’s 2022 earnings has been revised upward by 26 cents in the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 46.9%. ASIX has rallied 65.8% in a year. It currently carries a Zacks Rank of 2 (Buy).
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PPG to Enrich Portfolio on Arsonsisi's Powder Coating Unit Buyout
PPG Industries, Inc. (PPG - Free Report) recently inked an agreement to acquire the powder coatings manufacturing division of Arsonsisi. The buyout is anticipated to close in the first quarter of 2022 and the financial terms of the deal are still under the wraps.
Powder coatings are one of the rapidly growing coating technologies due to their sustainability benefits, increased durability, transfer efficiency and other stellar performance functionalities. Powder coatings do not emit solvents, given their low-VOC nature and can be reclaimed or reused during application.
Based in Italy, Arsonsisi is an industrial coatings company and is a leading supplier of specialty powder coatings for the architectural and industrial markets. In 2021, the Arsonsisi powder business generated sales of roughly $15 million.
Per the terms of the deal, PPG will takeover Arsonsisi’s highly automated powder manufacturing facility in Verbania, Italy, which can make both small and large batches.
The acquisition, when completed, will enable PPG to rev up its powder coatings product portfolio in the Europe, Middle East and Africa (EMEA) region. The product menu will be enhanced to include metallic bonding, which is one of the most flourishing markets for powder coatings, being used in specialty finishes for automotive, appliance and general industrial applications.
PPG is highly optimistic about this acquisition. In its perpetual commitment to sustainable innovations that exceed customer needs, PPG is investing in powder capabilities globally and this latest acquisition is in sync with the company’s goal to achieve 40% of its sales from sustainably advantaged products by 2025. The inclusion of this business will boost PPG’s sustainable coatings capability and offer its EMEA customers expanded powder coating options to cater to the surging demand for these sustainable coatings.
Having set a strong foothold as an innovator in powder coatings, PPG has always showcased its leadership through powder advancements, including edge coverage and fluoroethylene vinyl ether (FEVE) fluoropolymer coatings for architectural metals. In fact, this Pennsylvania-based paints giant is the only comprehensive solution provider that can supply and service high-performance powder and all other coatings technologies.
Shares of PPG have gained 9% in the past year compared with a 7.1% rise of the industry.
The company, in its last earnings call, stated that while it expects demand to remain strong, it anticipates the ongoing supply-chain crisis to continue throughout the first quarter of 2022, affecting its ability to manufacture and deliver products. It also expects raw material cost inflation to persist along with higher logistics and labor costs.
PPG projects earnings per share (EPS) between 84 cents and $1.02 for first-quarter 2022. Adjusted EPS are expected in the range of $1.02-$1.20, excluding amortization expenses of 14 cents and costs related to earlier approved and communicated business restructuring of 4 cents.
This Zacks Rank #4 (Sell) company also expects aggregate net sales volumes to be down a mid-single-digit percentage on a year-over-year basis for first-quarter 2022. The corporate expenses are projected to be around $70 million.
Stocks Worth Considering
Some better-ranked stocks in the basic materials space include Albemarle Corporation (ALB - Free Report) , Commercial Metals Company (CMC - Free Report) and AdvanSix Inc. (ASIX - Free Report) .
Albemarle, currently sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 51.5% for 2022. The Zacks Consensus Estimate for Albemarle’s 2022 earnings has been revised upward by 32 cents in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 22.1%. ALB has rallied around 36.1% in a year.
Commercial Metals, flaunting a Zacks Rank #1, has a projected earnings growth rate of 62% for the current fiscal year. The consensus estimate for Commercial Metals’ current fiscal-year earnings has been revised upward by $1.62 in the past 60 days.
Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters, missing once. It has a trailing four-quarter earnings surprise of 13.1%, on average. CMC has rallied around 31.4% in a year.
AdvanSix has a projected earnings growth rate of 7.9% for 2022. The Zacks Consensus Estimate for AdvanSix’s 2022 earnings has been revised upward by 26 cents in the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 46.9%. ASIX has rallied 65.8% in a year. It currently carries a Zacks Rank of 2 (Buy).