Hempel Buys Sherwin Asset to Gain Foothold in Australian Market
(Bloomberg) -- After seeing a deal in its backyard fall through, Denmark’s Hempel A/S is traveling about 9,000 miles for its next target.
The coatings group agreed to buy Wattyl from Sherwin-Williams Co. to expand in Australia and New Zealand, and further into southern and eastern Asia, Chief Executive Officer Lars Petersson said in an interview Friday.
Petersson is acquiring one of Australia’s top suppliers of decorative paint and coatings as part of his plan to double the size of the company to 3 billion euros ($3.6 billion) in revenue within five years. Even after paying for Wattyl, Hempel will still have about 1 billion euros available for takeovers after improving margins and cash generation.
Hempel recently lost out to U.S.-based PPG Industries in its pursuit of Finland’s Tikkurila Oyj.
“It’s the name of the game that you win some, you lose some,” Petersson said. “We’re really happy to land this deal with Sherwin and we’re looking at other opportunities too.”
Wattyl generates about $200 million in revenue. Petersson declined to provide details on the purchase price or the multiple. Hempel will be going up against Australia’s market leader DuluxGroup, acquired by Nippon Paint Holdings Co.
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