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Axalta to Snap Up U.K.-Based Automotive Refinishing Products Maker U-POL for $590M

Industrial coatings systems maker Axalta Coating Systems (AXTA) has signed an agreement to acquire U.K.-based automotive refinishing products maker U-POL Holdings for nearly $590 million.

Philadelphia-based Axalta Coating manufactures and sells liquid and powder coatings for refinish aftermarket, commercial vehicles and industrial coating systems.

It expects to record annual operating efficiencies and synergies of around $10 million within 18 to 24 months of the completion of the acquisition. The company expects the transaction to close in the second half of the year.

The CEO of Axalta, Robert Bryant, said, “U-POL’s expertise in refinish accessories and protective coatings is highly complementary to Axalta’s business and expands our addressable market into the important and growing mainstream and economy-based refinish segment as well as the consumer do-it-yourself (DIY) aftermarket. We also see opportunities for U-POL’s technology in whitespace applications for other areas of our business, including Mobility and Industrial Coatings.”

For 2021, U-POL expects net sales and adjusted EBITDA to total $145 million and $38 million, respectively. (See Axalta Coating stock chart on TipRanks)

Last month, BMO Capital analyst John McNulty reiterated a Buy rating on the stock with a price target of $46 (50.8% upside potential). The analyst expects the company to record earnings per share (EPS) of $0.06 in the second quarter.

Overall, the stock has a Strong Buy consensus rating based on 6 Buys and 2 Holds. The average Axalta Coating Systems price target of $38.75 implies 27.1% upside potential. Shares of the company have gained 37.2% over the past year.

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