PHILADELPHIA - Axalta Coating Systems (NYSE:AXTA), a global coatings company, has announced a definitive agreement to purchase The CoverFlexx Group, a manufacturer of automotive refinish and aftermarket coatings, from Transtar Holding Company.
The deal, which includes an initial cash payment of $285 million and an additional $10 million earnout based on 2024 performance, is slated for completion in the third quarter, pending regulatory approval and customary closing conditions.
The CoverFlexx Group, which reported $78 million in revenue in 2023, employs over 120 people and operates out of facilities in Brighton, Michigan, and Milton, Ontario.
The acquisition is set to bolster Axalta's Refinish business by integrating The CoverFlexx Group's range of economy-focused products, including primers, basecoats, clearcoats, aerosols, fillers, and paint shop accessories under well-known brands such as Transtar® Autobody Technologies, Pro Form™, and Aftermkt Armor™.
Chris Villavarayan, CEO and President of Axalta, stated that The CoverFlexx Group's value-based solutions complement Axalta's existing offerings. Troy Weaver, President of Axalta's Global Refinish, expressed enthusiasm for the expected significant value the acquisition will provide to customers and the growth it will support within the Refinish business.
Axalta, with a history spanning over 150 years, serves more than 100,000 customers in over 140 countries, offering a range of coatings solutions for various applications.
This news is based on a press release statement from Axalta Coating Systems.
InvestingPro Insights
As Axalta Coating Systems (NYSE:AXTA) gears up to expand its market reach through the acquisition of The CoverFlexx Group, the company's financial health and stock performance come into focus. According to the latest data from InvestingPro, Axalta has a market capitalization of $7.95 billion and has shown a steady revenue growth, with the last twelve months as of Q1 2024 reporting a revenue increase of 4.0%. This growth trajectory aligns with the company's strategic investments and acquisitions.
InvestingPro Tips highlight that Axalta boasts a perfect Piotroski Score of 9, indicating a strong financial position, which could be reassuring to investors considering the company's recent activities. Additionally, the company has been trading near its 52-week high, with the price at 98.74% of this peak, reflecting investor confidence in its market performance.
In terms of stock stability, Axalta has been noted for low price volatility, although some metrics suggest that stock price movements can be quite volatile. This dichotomy may be due to different time frames or market conditions being considered. Nevertheless, the company's strong return over the last three months, at 17.59%, is a testament to its positive momentum.
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With the company's next earnings date set for July 24, 2024, investors and analysts will be keenly watching how the acquisition of The CoverFlexx Group and the integration of its product lines will impact Axalta's financials and whether it will fuel further growth for the coatings giant.
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