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PPG Industries Closes Buyout of Romanian Paint Maker Deutek

PPG IndustriesPPG has wrapped up its acquisition of leading Romanian paint and architectural coatings maker, Deutek S.A. from the Emerging Europe Accession Fund ("EEAF"). Financial terms of the deal were not divulged.

Deutek, which recorded sales of €30 million in 2015, makes and markets a broad portfolio of professional and consumer paints. Its portfolio includes the Oskar and Danke! brands. The entity's products are sold across more than 120 do-it-yourself stores and 3,500 independent retail outlets in Romania.

The buyout expands PPG Industries' foothold in Romania and also complements its positions in Poland, Czech Republic, Hungary and Slovakia. It adds the rapidly-growing paint brands in Romania, where PPG Industries has a small presence in architectural coatings.

PPG Industries' shares gained 2% over the last three months while the Zacks categorized Chemicals-Diversified industry has gained 9.7% over the same period. PPG Industries remains exposed to significant currency headwinds. Moreover, the company faces macroeconomic challenges and some of its end-markets including marine still remain sluggish.

PPG Industries expects a modest improvement in global demand and projects year-over-year earnings growth in fourth-quarter 2016 to be similar or modestly higher than that of the third quarter. The company's board recently approved broad restructuring actions aimed at lowering cost structure globally, with special emphasis on regions and end-use markets with weakest business conditions. The company expects to record a pretax restructuring charge of $190−$200 million, or 53−58 cents per share, in the fourth quarter of 2016.

With the conclusion of the restructuring actions, PPG Industries expects to generate $120−$130 million in annual savings, with $40−$50 million of savings expected to be realized in 2017. These measures are likely to keep the company competitive in the end markets by lowering costs.

PPG Industries currently carries a Zacks Rank #3 (Hold).

PPG INDS INC Price

PPG INDS INC Price | PPG INDS INC Quote

Stocks to Consider

Better-ranked companies in the chemical space include The Chemours Company CC , Kronos Worldwide, Inc. KRO and Methanex Corporation MEOH all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Chemours has an expected earnings growth of around 60.1% for the current year.

Kronos has an expected earnings growth of around 261.5% for the current year.

Methanex has an expected long-term growth of around 15%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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