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Axalta Acquired Plascoat Systems Limited

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Axalta acquired Plascoat Systems Limited

On August 14, 2017, Axalta (AXTA) announced that it acquired Plascoat Systems Limited—its fourth acquisition in seven months. Axalta didn’t disclose the transaction’s financial terms and the deal’s duration. The transaction includes Plascoat’s manufacturing facilities in Farnham, England, and Zuidland, Netherlands.

Plascoat was established in 1952. It specializes in the manufacturing and application of thermoplastic polyolefin coatings. Its portfolio includes the Plascoat PPA 571—a plastic coat used mainly for outdoor applications like potable water pipes. It also has the Talisman—a tough plastic coating that caters to the dishwasher basket market.

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Michael Cash, Axalta’s senior vice president and the industrial coatings division president, said, “Over the last 65 years, Plascoat has led the way in developing innovative, environmentally responsible coatings that meet the high corrosion resistance demands of customers around the globe. We look forward to bringing this knowledge and expertise into Axalta to augment our existing thermoplastic powder coatings business and provide even more innovative products and solutions to our customers.”

Axalta’s stock movement for the previous week

Axalta stock had a positive week. The stock rose 1.6% and closed at $29.20. Axalta traded 7.80% below the 100-day moving average price of $31.68. The company lost ~8% after it announced disappointing 2Q17 earnings. On a year-to-date basis, the stock has returned 7.4%. Its peers Sherwin Williams (SHW), PPG Industries (PPG), and RPM International (RPM) have returned 22.40%, 7.70%, and -10.0%, respectively, for the same period. Analysts expect Axalta stock to rise to $32.88 over the next 12 months, which implies a return potential of 12.6% over the closing price of $29.20 as of August 18, 2017.

Investors looking for exposure to Axalta can invest in the iShares U.S. Basic Materials ETF (IYM). IYM has invested 1.0% of its portfolio in Axalta as of August 18, 2017.

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