The Sherwin-Williams Company (SHW) has acquired Sweden-based Becker Industrial Products AB, a subsidiary of AB Wilh for SEK 1.7 billion (US$227 million). Becker is Europe’s leading manufacturer of industrial coatings for metals and plastics as well as products for surface treatment of wood, and the world leader in artists' materials. It is also a technology leader in water, UV, and other wood coatings. The transaction is expected to close in the third quarter of 2010.
Sherwin-Williams would integrate the Becker operations with its Global Finishes Group segment that develops, licenses, manufactures and sells architectural paint and coatings, industrial and marine products, automotive finishes and refinish products, and original equipment manufacturer coatings and related products in North and South America, Europe and Asia. The segment also licenses certain technologies and trade names worldwide, besides distributing Sherwin Williams branded products through a network of 541 company-operated branches.
Sherwin-Williams would integrate the Becker operations with its Global Finishes Group segment that develops, licenses, manufactures and sells architectural paint and coatings, industrial and marine products, automotive finishes and refinish products, and original equipment manufacturer coatings and related products in North and South America, Europe and Asia. The segment also licenses certain technologies and trade names worldwide, besides distributing Sherwin Williams branded products through a network of 541 company-operated branches.
With its 9 manufacturing facilities spread across the world, Becker serves the consumers in joinery, kitchen cabinet, furniture, and flooring markets. The acquisition would strengthen Sherwin William’s position in these end-markets. Sherwin expects to benefit once these markets recover from recession.
Acquisitive Sherwin
The Becker Industrial Products is Sherwin Williams’ third acquisition in the last couple of years. In March this year, the Cleveland, Ohio, based paints and coatings maker took over the Industrial Wood Coatings business of Pianoro, Italy based Arch Chemicals Inc. Arch Industrial Wood trades under the Sayerlack brand name and is a leading coatings innovator in the joinery, furniture and cabinets markets.
Earlier in 2008, Sherwin-Williams made two acquisitions. It acquired the liquid coatings affiliates of Singapore-based Inchem Holdings International Limited. Liquid coatings are applied to wood and plastic products including furniture, cabinets, flooring and electronic products. The coatings are made and sold in China, Vietnam, and Malaysia and distributed to 15 other Asian countries.
Sherwin Williams also acquired Becker Powder Coatings Inc. in the US and in exchange sold off its North American coil coatings business to Becker. Becker Powder Coatings produces powder coatings applied to appliances, metal furniture, fixtures, equipment, and electronic products manufactured throughout North America.
Sherwin Williams is the largest U.S. producer of paints and coatings. End-market demand appears to be stabilizing and the company remains committed to increasing market share among its core customers − professional painting contractors. For 2010, the company plans to open 20−30 net new paint stores. Sherwin is also taking away market share from competitors including ICI Paints and PPG Industries (PPG).
Currently, Sherwin-Williams is a short-term (1 to 3 months) Zacks #3 Rank (“Hold”) and a long-term (6+ months) Neutral recommendation.
Currently, Sherwin-Williams is a short-term (1 to 3 months) Zacks #3 Rank (“Hold”) and a long-term (6+ months) Neutral recommendation.
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