PPG completes acquisition of DEUTEK
On January 5, 2017, PPG Industries (PPG) announced that it had completed the acquisition of DEUTEK, a leading Romanian paint and architectural coatings manufacturer. PPG didn’t disclose the financial terms of the deal. DEUTEK reported sales of $30 million euros in 2015. For PPG Industries, this deal is very important, as the acquisition will increase its presence in the region. PPG has a very small presence in architectural coatings.
Jean-Marie Greindl, PPG’s senior vice president, said, “this important acquisition in Romania extends our presence in the region and complements our positions in Poland, Czech Republic, Hungary, and Slovakia.”
DEUTEK manufactures and markets consumer and professional paints. DEUTEK has brands like OSKAR and Danke. DEUTEK products are sold through 120 do-it-yourself stores and 3,500 independent retail stores in Romania.
PPG’s stock price
As of January 6, 2017, PPG Industries closed at $95.59 and had risen 0.9% for the week. The Materials Select Sector SPDR ETF (XLB), which holds 4.5% in PPG as of January 6, rose 1.9% and outperformed PPG Industries for the week. XLB closed at $50.62. PPG peers Sherwin-Williams (SHW) and Valspar (VAL) rose 3.8% and 0.3%, respectively, while RPM International (RPM) dropped 1.7% for the same period.
PPG’s stock price closed 2.7% lower than the 100-day moving average price of $98.28. The 100-day moving average price has dropped from $100.68 on December 1, 2016, to $98.62 as of December 30, 2016, indicating a downward trend in the stock. Analysts expect PPG’s 12-month target price to be at $110.60, implying a potential return of ~15.7% over the closing price of January 6, 2017. In 2016, PPG Industries dropped 4.0%.