PPG unloads auto glass operations for $330 million
More than a year after announcing its intent to sell off its automotive OEM glass and replacement glass services business, PPG Industries of Pittsburgh signed a sale agreement July 8 with private equity firm Kohlberg & Co. LLC, Mount Kisco, N.Y. Under the agreement, PPG will sell the auto glass business to a new company formed by Kohlberg in exchange for $330 million and a 40 percent minority ownership stake in the new company, according t to a PPG release the same day.
PPG’s auto glass and services business supplies automotive OEM windshields, rear and side windows, sunroofs and assemblies for auto and truck manufacturers. It also supplies and distributes aftermarket replacement auto glass parts. In addition, the division provides insurance claim services through its Lynx Services subsidiary, glass management software through its GTS subsidiary and e-business solutions through its Glaxis division.
The sale includes nine North American manufacturing and fabrication plants, nine satellite parts assembly plants and the Lynx Services claims-management service centers in Fort Myers, Fla., and Paducah, Ky. In total, the operations employ about 4,400 people.
“This transaction … enables us to focus more on coatings and specialty products, and significantly reduces PPG’s exposure to the U.S. automotive market,” said PPG chairman and CEO Charles Bunch, in the release.
When PPG announced last spring that it would sell te business, officials G pointed to a steady decline in earnings and a struggling North American auto industry. PPG’s automotive OEM glass operating segment 2006 earnings declined year over year by $9 million, following a decline of $30 million in 2005, according to company reps.
“Significant structural changes continue to occur in the North American automotive industry, including the loss of U.S. market share by General Motors, Ford and Daimler-Chrysler,” said Jack Maurer, PPG director of corporate communications, in the 2006 annual report. “This has created a challenging and competitive environment for all suppliers to the domestic OEMs, including our operating segment.”