Sherwin-Williams and The Valspar Corporation have entered into a definitive agreement under which Sherwin-Williams will acquire Valspar for $113 per share in an all-cash transaction, or an enterprise value of approximately $11.3 billion. At $113 per share, the transaction, which has been unanimously approved by the boards of directors of both companies, represents a premium of approximately 41% to Valspar’s volume weighted average price for the 30 days up to and including March 18, 2016.
Sherwin-Williams intends to finance the transaction through a combination of cash on hand, liquidity available under existing facilities and new debt. Sherwin-Williams has obtained committed bridge financing from Citigroup Global Markets in support of the transaction and is committed to maintaining its current dividend and rapid deleveraging using significant free cash flow.
Citi acted as the lead financial advisor to Sherwin-Williams, and J.P. Morgan Securities also acted as financial advisor. Jones Day and Weil, Gotshal & Manges are acting as legal advisors to Sherwin-Williams. Goldman Sachs and BofA Merrill Lynch are acting as financial advisors to Valspar and Wachtell, Lipton, Rosen & Katz is acting as its legal advisor.
Sherwin-Williams and Valspar have highly complementary paints and coatings offerings and this combination enhances Sherwin-Williams position as a premier global paints and coatings provider
John G. Morikis, president and chief executive officer of Sherwin-Williams, said, “Valspar is an excellent strategic fit with Sherwin-Williams. The combination expands our brand portfolio and customer relationships in North America, significantly strengthens our Global Finishes business, and extends our capabilities into new geographies and applications.”
Gary E. Hendrickson, chairman and CEO of Valspar, said, “We are pleased to announce this compelling transaction, which delivers immediate and certain cash value to our stockholders. We believe that Sherwin-Williams is the right partner to utilize our array of brands and create a premier global coatings company.”
The transaction is expected to close by the end of Q1/17 and is subject to the approval of Valspar shareholders and customary