Axalta CEO Charlie Shaver Examines Role of Private Equity in Coatings Industry Value Chain
Axalta Coating Systems Chairman and CEO, Charlie Shaver, presented insights into the strategic implications of private equity in the coatings industry value chain at a meeting of industry leaders attending the global Coatings Summit in Miami, Florida.
"Driven largely by the desire to strategically position themselves within the industry, over the past 20 years private equity firms have increased their level of activity within this M&A space," explained Mr. Shaver. "Paints and coatings face many barriers to entry and the products offered by the companies in this segment are at a low risk of obsolescence. These factors, among others, provide investors with an opportunity for strong cash flow and ROI."
The analysis examines private equity investments of varying sizes at every strategic point along the coatings value chain. Initially, more investments made upstream in raw materials companies. Over time, the review observes, more investments were completed downstream among coatings manufacturers, distributors and end users of the industry's products, with private equity playing a major role.
"Private equity firms have an increasingly larger pool of money that needs to be deployed and put to work," concluded Mr. Shaver. "At the same time, PE firms are becoming more comfortable acquiring companies that can benefit from greater operational efficiencies as well as stronger balance sheets. PE firms are likely to continue to take advantage of opportunities in the hope of improved productivity and returns across the sector."
Axalta, the former DuPont Performance Coatings business, is a leading global coatings manufacturer employing 12,000 people and having more than 145 years of experience in the coatings industry.