Axalta to Acquire U-POL for Automotive Aftermarket

Axalta Coating Systems (NYSE: AXTA), a global leader in powder and liquid paints, announced today that it has signed definitive agreements and purchase agreements to acquire U-POL Holdings Limited ("U-POL") from Graphite Capital Management LLP and other owners for GBP 428 million (approximately USD 590 million). Founded in 1948 and based in the United Kingdom, U-POL is a leading manufacturer of repair and maintenance products used primarily for automotive refinish paints and post-sale protective applications. The operation manufactures a wide range of high-quality auto repair products and accessories, including fillers, paints, aerosols, adhesives and paint-related products, as well as other automotive post-sale protective coatings. U-POL sells its products in more than 100 countries and is recognized for leading brands including Raptor®, Dolphin® and Gold™, among others. Through its existing sales and distribution channels, Axalta will accelerate the growth of U-POL products by expanding market access and will reach new customers for its Automotive Refinish Paints portfolio by leveraging U-POL's distribution channels. Axalta CEO Robert Bryant stated, "Axalta is the global leader in the premium automotive refinish paints segment. U-POL's expertise in automotive refinish paint accessories and protective coatings substantially completes Axalta's business and expands our served market into the significant and growing mainstream and economy-based automotive refinish paints segment as well as the consumer do-it-yourself (DIY) post-sale market. Additionally, we see opportunities for U-POL technology in gap applications for other parts of our business, including Mobility and Industrial Coatings."

U-POL's skilled global organization and its manufacturing facility and R&D laboratory in Wellingborough, England, bring significant capabilities to the company's commercial, manufacturing and technology organizations, enhancing Axalta's ability to serve its customers worldwide.

  Troy Weaver, Senior Vice President, Axalta Global Automotive Refinish Paints, stated, "The cultures that the two companies have built around innovation, quality and strong working principles are highly compatible. We look forward to serving our customers with these additional capabilities and welcoming U-POL's dedicated team members to the Axalta family." U-POL is projecting net sales of approximately USD 145 million and adjusted EBITDA of approximately USD 38 million for fiscal year 2021. Axalta expects to create meaningful operating and commercial synergies between the combined global operations. Expected annual operating synergies and productivity improvements of approximately USD 10 million are expected to be fully realized within 18 to 24 months following closing. The approximately USD 590 million total consideration reflects approximately 12.5x adjusted EBITDA for 2021, including the run-rate operating synergies and productivity improvements. Additionally, the identified commercial synergy opportunities are expected to create significant value over time. Excluding transaction-related costs associated with the acquisition, Axalta expects the acquisition to be immediately accretive to adjusted EBITDA margins. Axalta plans to finance the acquisition from its available cash. The transaction is expected to close in the second half of 2021, subject to customary antitrust clearances and other customary closing conditions.