The Valspar Corporation
) announced that it has entered into a long-term strategic supply
agreement with Ace Hardware Corporation wherein it will
manufacture and supply Ace branded paints as well as produce
Valspar branded paints for 4000 Ace stores in the U.S. At the
same time, Valspar also announced the acquisition of Ace
Hardware's paint manufacturing assets, including two
manufacturing facilities located near Chicago.
With this strategic relationship, Ace expects to improve the
quality and performance of the Ace-branded paint products and
benefit from Valspar's expertise in color, strong sales force and
a competitively priced product assortment. Ace stated that the
deal will facilitate more paint sales and the company will be
able to expand its presence in the liquid paint market.
Introduction of Valspar paints in Ace stores is expected to begin
in 2013. Ace will retain ownership of its existing paint brand
trademarks, including Clark+Kensington and Ace Paint as Valspar
will manufacture product lines exclusively for Ace.
In November 2012, Valspar released its fourth quarter fiscal
2012 results. The company's adjusted earnings of 86 cents per
share in the quarter ended October 26, 2012 beat the Zacks
Consensus Estimate by a penny and exceeded the year-ago earnings
of 84 cents. The results were aided by productivity gains and
acquisition of new businesses.
Sales in the quarter went down 2.2% year over year to $1.02
billion, missing the Zacks Consensus Estimate of $1.08 billion.
For fiscal 2012, sales increased 2% to $4.02 billion.
Valspar, which competes with
Sherwin Williams Company
PPG Industries Inc.
), currently retains a short-term Zacks #2 Rank (Buy). We have a
long-term (more than 6 months) Neutral recommendation on the
PPG INDS INC (PPG): Free Stock Analysis
SHERWIN WILLIAM (SHW): Free Stock Analysis
VALSPAR CORP (VAL): Free Stock Analysis
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