Ceramic Industry News

PPG to Sell Controlling Interest in Auto Glass Business to Kohlberg (posted 7/14/08)

July 14, 2008
/ Print / Reprints /
ShareMore
/ Text Size+

PPG Industries has signed an agreement with an affiliate of funds managed by Kohlberg & Company, LLC, under which PPG will divest its automotive glass and services business to a new company formed by Kohlberg. PPG will receive $330 million in gross cash proceeds, plus a minority ownership interest of approximately 40% in the new company (subject to closing adjustments). Net of payments to former minority interests, transaction fees, expenses and taxes, the transaction will result in approximately $270 million in cash to PPG.

“This transaction is another positive step forward in our portfolio transformation,” said Charles E. Bunch, PPG chairman and chief executive officer. “It enables us to focus more on coatings and specialty products, and significantly reduces PPG’s exposure to the U.S. automotive market.”

The company stated that the net cash proceeds from the transaction will be utilized for general corporate purposes. In accordance with generally accepted accounting principles, the results of the automotive glass and services business were reported as discontinued operations beginning in September 2007, and, because PPG will hold an ownership interest in the newly formed company, it will reclassify the business into continuing operations in the company’s historical and current financial statements.

In the second quarter, the company will record a one-time, non-cash charge to reflect a catch-up of depreciation expense, which was suspended when the business was classified as a discontinued operation. In addition, the company will also record a one-time charge relating to the impact of benefit changes, including accelerated vesting, negotiated as part of the transaction. The total of these two second quarter charges is estimated to be approximately $25 million after tax, with the final amount pending completed actuarial calculations.

The closing is subject to customary closing conditions, including receipt of any required regulatory approvals. PPG is expecting to record a slight book gain upon closing, which is anticipated in the third quarter. Also, PPG will retain certain liabilities for pension and post-employment benefits earned for service up to the date of divestiture, and there may be one-time charges in future periods related to these obligations. After completing the divestiture, PPG will account for its remaining interest in the new company under the equity method of accounting.

The automotive glass and services business supplies automotive OEM windshields, rear and side windows, sunroofs, and assemblies for auto and truck manufacturers, and it supplies and distributes replacement automotive glass products for use in the aftermarket. It also 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 business manufactures and fabricates automotive glass products in nine North American plants located in Berea, Ky.; Creighton, Meadville and Tipton, Pa.; Crestline, Ohio; Evansville, Ind.; Evart, Mich.; and Hawkesbury and Oshawa, Ontario, Canada. In addition, there are nine satellite parts assembly plants, and LYNX Services claims management centers are located in Fort Myers, Fla., and Paducah, Ky. Combined, the businesses employ approximately 4400 people.

For more information, visit www.ppg.com.

Links

Did you enjoy this article? Click here to subscribe to Ceramic Industry Magazine.

You must login or register in order to post a comment.

Multimedia

Videos

Image Galleries

June 2014 Issue Highlights

Our June 2014 issue is now available!

Podcasts

Manufacturing Day 2014

Manufacturing Day organizers share their insights with Managing Editor Kelsey Seidler.

More Podcasts

Ceramic Industry Magazine

CI September 2014 cover

2014 September

You won't want to miss the CI Top 10, traditionally our most popular article of the year!

Table Of Contents Subscribe

THE CERAMIC INDUSTRY STORE

M:\General Shared\__AEC Store Katie Z\AEC Store\Images\Ceramics Industry\handbook of advanced ceramics.gif
Handbook of Advanced Ceramics Machining

Ceramics, with their unique properties and diverse applications, hold the potential to revolutionize many industries, including automotive and semiconductors.

More Products

Clear Seas Research

Clear Seas ResearchWith access to over one million professionals and more than 60 industry-specific publications,Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.

Directories

CI Data Book July 2012

Ceramic Industry's Directories including Components, Equipment Digest, Services, Data Book & Buyers Guide, Materials Handbook and much more!

STAY CONNECTED

facebook_40px twitter_40px  youtube_40pxlinkedin_40google+ icon 40px