Citation
(2006), "Akzo Nobel bids on Sico, Canada's leading coatings company", Pigment & Resin Technology, Vol. 35 No. 6. https://doi.org/10.1108/prt.2006.12935fab.012
Publisher
:Emerald Group Publishing Limited
Copyright © 2006, Emerald Group Publishing Limited
Akzo Nobel bids on Sico, Canada's leading coatings company
Akzo Nobel bids on Sico, Canada's leading coatings company
Akzo Nobel, Arnhem, The Netherlands, the world's largest coatings manufacturer, has made an offer of CAD 20.00 per common share to acquire Sico, Inc., Canada's leading coatings company.
Sico's two largest shareholders, who own around 34 percent of the company's common shares, have expressed their full support for the deal and have signed a binding commitment to tender their shares under the offer. The Sico board of directors has also recommended the offer to its shareholders.
Active in the architectural-coatings market for more than 65 years and headquartered in Quebec City, Sico, Inc. develops, manufactures and markets architectural paints including key brands such as Sico, Para and Betonel, as well as related products such as Mulco caulking compounds. The company, which also produces and supplies industrial coatings, employs around 1,000 people in Canada, US and Mexico, and achieved record sales in 2005 of CAD 312 million.
“This proposed deal underlines our strong commitment to the company's growth strategy for Coatings, which involves accelerating our acquisition activity and investing in major expansion opportunities to enhance our portfolio and strengthen our global presence,” said Akzo Nobel CEO Hans Wijers, who is also the company's board member responsible for Coatings.
“With its strong local brands, Sico fits perfectly into Akzo Nobel's current expansion strategy in the architectural segment. The proposed acquisition will provide us with a leading market position in Canada and allow us to grow in this highly attractive market.”
Pierre Dufresne, president and chief executive officer of Sico, added, “We welcome the offer from Akzo Nobel, which represents a premium of approximately 44 percent above Sico's average share price over the past four- week period. Being a part of the world's biggest coatings company will not only boost the profile of our brands but also will give our employees access to world- class expertise and technology. Our customers will also benefit from enhanced products and services, all of which will prove invaluable in terms of building the business and maintaining our growth momentum.”
The total price on a fully diluted basis is CAD 295 million (EUR 211 million) representing nine times EBITDA of Sico in 2005. This amount will include preferred shares, which Akzo Nobel will acquire at par value as well as other net debt. Akzo Nobel's offer to acquire Sico is subject to various regulatory approvals and acceptance by shareholders.