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CHEMICAL TECHNOLOGY

Axalta will Acquire U-POL, a Leading Manufacturer of Automotive Aftermarket Paints, Protective Coatings, and Accessories

Axalta | July 08, 2021

Axalta Coating Systems, a leading global supplier of liquid and powder coatings, announced today that it has entered into definitive agreements to acquire U-POL Holdings Limited from Graphite Capital Management LLP and other holders for £428 million (approximately $590 million), subject to certain adjustments stated in the transaction's Sale and Purchase Agreements.

U-POL, located in the United Kingdom, was founded in 1948 and is a leading manufacturer of repair and refinish products used mainly for automotive refinish and aftermarket protective applications. The company manufactures a wide variety of high-quality automotive refinishing goods and accessories, such as fillers, coatings, aerosols, adhesives, and paint-related products, as well as other automotive aftermarket protective coatings. U-POL distributes its products in over 100 countries and is well-known for its top brands, such as Raptor, Dolphin, and Gold. Axalta will accelerate the expansion of U-products POL's by increasing market access via Axalta's current sales and distribution channels while using U-distribution POL's networks to reach new clients with its Refinish Coatings portfolio.

U-POL's talented global organization and its production facility and R&D lab in Wellingborough, England, bring huge capabilities to the company's commercial, manufacturing, and technology organizations, improving Axalta's capacity to serve customers worldwide.

For the fiscal year 2021, U-POL expects net sales of about $145 million and adjusted EBITDA of around $38 million. Axalta expects substantial operational and commercial benefits throughout the merged global businesses. Annual operating savings and efficiency of about $10 million are anticipated to be fully achieved within 18 to 24 months after the transaction's completion. The entire consideration of approximately $590 million reflects an adjusted EBITDA multiple of about 12.5x for the full year 2021E, including run-rate operating synergies and efficiencies. Furthermore, the identified commercial efficiencies are expected to provide significant value over time. As a result, Axalta expects that the acquisition will be immediately accretive to adjusted EBITDA margin, excluding transaction-related costs. Axalta intends to fund the acquisition using cash on hand.

About Graphite Capital
Graphite is a specialized provider of private equity financing to UK-based mid-market companies. Graphite invests in both management buyouts and development capital opportunities.

About Axalta Coating Systems
Axalta is a global coating industry leader, offering clients innovative, colorful, beautiful, and long-lasting coating solutions. Our coatings are intended to prevent corrosion, improve productivity, and enhance durability in a wide range of applications, including light vehicles, commercial vehicles, and refinish applications, as well as electric motors, building facades, and other industrial uses. With over 150 years of expertise in the coatings industry, Axalta's global team is always looking for new ways to provide the best coatings, application systems, and technology to our more than 100,000 clients in over 130 countries.

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