Pittsburgh, USA, based PPG Industries Inc is buying SigmaKalon Group, the Uithoorn, Netherlands-based coatings producer, from private equity major Bain Capital for €2.2 billion ($3.1 billion), including debt.

The deal, which is subject to regulatory approvals, will help PPG expand its operations in Europe and Asia. In Europe, where SigmaKalon is the second-largest coatings company, PPG''s sales will more than double with the acquisition.

SigmaKalon is the result of a 1999 merger of British decorative paints producer Kalon Group, a subsidiary of Total SA of France, and Sigma Coatings, a subsidiary of Belgian oil producer Petrofina. The company, which had revenues of about $2.76 billion in 2006, was acquired by Bain in 2003.

SigmaKalon''s brands include Sigma Coatings, Johnstone''s, Leyland, Primalex and Seigneurie. The company, which has a significant presence in Eastern Europe, recently acquired an architectural coatings firm in China.

Earlier this year SigmaKalon acquired Burgdorf, Switzerland, based Schoch Holding AG and its subsidiaries, which specialise in coatings for the metal finishing, bicycles, powder and plastics industries. It also formed SigmaKalon IVY ( Shanghai) Paints Co.Ltd., a decorative paints joint venture in China, in which the Dutch group owns 85 per cent and the Shanghai IVY 15 per cent.

PPG, which employs more than 34,000 people in the paints, coatings, chemicals and other businesses in more than 25 countries, made a profit of $711 million on revenue of $11.04 billion in 2006.

The American company is in the process of restructuring itself to focus on coatings and specialty products. It wants to reduce its exposure to the American automotive market, and towards this end it announced its intention in mid-September this year to sell its auto glass businesses to an associate of private equity firm Platinum Equity for about $500 million. Completion of this transaction is expected by the end of 2007.

PPG has also decided to sell its fine chemicals business to ZaCh System, the fine chemicals subsidiary of Milan, Italy, based Zambon Company for about $65 million.

In other areas, PPG Industries is pushing ahead for increased market share. In July this year, PPG and Nevada, USA, based Altair Nanotechnologies tied up for the development and commercialisation of eco-friendly nanometal oxide dispersion technology with aerospace and other applications. The three-year research agreement has provision for a further five-year commercialization and supply contract beginning 2008. Altairnano will use PPG''s proprietary resin technology to make nanometal oxide chemical dispersion.

PPG Industries'' acquisitions in recent years include:

• Architectural paints Barloworld Coatings Australia in July 2007.
• Intercast Europe, maker of non-prescription sun lenses, with production and distribution operations in Italy, Thailand and Hong Kong.
• Eldorado Chemical Co., a US maker of paint strippers and technical cleaners for the aerospace industry.
• The remaining 50 per cent of South Korean coatings producer Dongju Industrial Co., Ltd., half of whose equity PPG already owned.
• Independent Glass Distributors, an Iowa-based wholesale distributor of automotive replacement glass and related products in 2006.
• Ameron International Corporation''s performance coatings and finishes business in 2006.
• Sierracin Corporation, a US supplier of advanced composite transparencies to the aerospace industry.
• Spectra-Tone Paint Corporation, an American architectural coatings manufacturer.
• Australian automotive refinish coatings and light industrial and high-performance coatings company Protec Pty. Ltd. and its New Zealand unit Fortec Paints Ltd.
• Architectural coatings group Shanghai Sunpool Building Material Co. and its associated companies, in 2005.

The Bain Capital management has ample reason to be happy with the sale. Walid Sarkis, a managing director at Bain Capital in London, says, "SigmaKalon has very successfully developed over the last four years into a best-in-class global coatings company, and we believe the combination with PPG will allow the company to continue — and in some areas accelerate — its successful strategy."

Successful is not the word for it. Bain had bought SigmaKalon for about $1 billion. Selling it for $3.1 billion in just four years is a hit!