Valspar CEO: Not Interested In Buying DuPont Coatings Business
February 14 2012 - 12:01PM
Dow Jones News
Valspar Corp. (VAL), the U.S. paint maker, on Tuesday ruled
itself out of bidding for the $3 billion coatings business that
DuPont Co. (DD) is looking to sell.
Gary E. Hendrickson, chief executive of Minneapolis-based
Valspar, said the DuPont unit was "a little too big a bite for us"
as the company reported better-than-expected fiscal first quarter
earnings and raised its full-year guidance.
Merger and acquisition activity in the chemicals sector has
intensified in recent months, and DuPont hired Credit Suisse Group
AG to lead the potential sale of its performance coatings unit,
according to people familiar with the situation.
Large paint manufacturers, such as Akzo Nobel NV of the
Netherlands, and private-equity firms are seen as potential
buyers.
Hendrickson, speaking to analysts on a conference call, said the
company still faced a sluggish U.S. housing market as well as other
demand "challenges, notably in Europe and China.
The Chinese market is expected to pick up in the second half of
the year after a flat performance in the latest quarter, and
Valspar also sees costs for raw materials such as the titanium
dioxide used to whiten paint rising by mid-single digits this
year.
.Valspar, which has a market value of $4.3 billion, reported
profit of $55.8 million for the quarter to Jan. 27 compared with
$33.4 million a year earlier. Per-share earnings rose to 58 cents,
10 cents ahead of consensus, from 34 cents.
The company raised its full-year profit guidance range by a dime
to $2.92 to $3.12 per share.
The stock was recently up 5.4% at $46.41, having reached an
all-time high earlier in the session.
-By Doug Cameron, Dow Jones Newswires; 312-750-4135;
doug.cameron@dowjones.com
(Tess Stynes contributed to this article.)
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