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PPG Completes the SEM Products Acquisition


Dec. 10 2018, Updated 9:41 a.m. ET

PPG completes the SEM Products acquisition

On December 3, PPG Industries (PPG) announced that it completed the acquisition of SEM Products. PPG Industries entered into a definitive agreement to acquire SEM Products on October 18. SEM Products is a US-based manufacturer that specializes in automotive refinish products. However, PPG Industries hasn’t disclosed the deal’s financial aspects.

The acquisition will likely help boost PPG Industries’ revenues and earnings in the fourth quarter. SEM Products will likely be integrated with PPG Industries’ automotive refinish business, which targets distributors and body shops’ needs. SEM Products has its headquarters in Rock Hill, South Carolina. Currently, the company has 80 employees.

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Stock price updates

The short week saw a market sell-off. PPG Industries stock fell as much as 5.6% and closed at $103.23 for the week ending December 7. The decline in the stock price pushed the stock to trade 4.1% below the 100-day moving average price of $107.60. PPG Industries’ 100-day moving average price has fallen from the high of $117.65 to the current levels, which indicates sluggishness in the stock. The fall caused the stock to trade sideways.

On a year-to-date basis, PPG Industries stock has extended its loss to 11.6%. RPM International (RPM) has gained 16.1%, while Sherwin-Wiliams (SHW) and Axalta (AXTA) have fallen 5.0% and 26.5%, respectively. However, analysts expect PPG Industries’ target price to be at $111.70, which implies a potential return of 8.2% over its closing price on December 7.

Investors could hold PPG Industries indirectly by investing in the Guggenheim S&P 500 Equal Weight Materials ETF (RTM). RTM fell 4.4% during the week. RTM invests 4.3% of its portfolio in PPG Industries.


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