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    4612   JP3749400002

NIPPON PAINT HOLDINGS CO., LTD.

(4612)
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Nippon Paint in $12 billion deal to buy Wuthelam assets; Wuthelam stake hits 60%

08/21/2020 | 05:14am EDT
FILE PHOTO: Illustration photo of Nippon Paint

Nippon Paint Holdings Co Ltd on Friday said it inked a deal worth 1.285 trillion yen ($12.18 billion) with Singapore's Wuthelam Group, whose stake in the Japanese company will rise to just under 60% from 39%.

Following the announcement of one of the biggest transactions in Asia this year, shares of Nippon Paint closed up 6.5% in a near-flat broader market.

As part of the deal, Nippon Paint will sell 1.185 trillion yen ($11.2 billion) worth of shares to Wuthelam.

Japan's top paint maker said it will use the funds raised as well as 100 billion yen in cash to buy out Wuthelam from their Asian joint ventures in countries including China, Malaysia and Thailand, as well as acquire Wuthelam's wholly owned business in Indonesia.

The 139-year-old Japanese firm is seeking growth outside its mature domestic market, and has prioritised global expansion.

Last year, it acquired Australia's top paint maker DuluxGroup Ltd in a near $3 billion deal.

Asia is Nippon Paint's most important market and accounts for 52% of its revenue, compared with 26% for Japan, according to the company's website.

The company may pursue more M&A deals should it need additional capital, Nippon Paint said during a conference call.

"Asia is becoming a key region for the company's sustainable growth in terms of both market size and growth rate due to its projected demographic and economic growth leading to increasing demand," Nippon Paint said in a statement.

Yuichiro Wakatsuki, chief financial officer of Nippon Paint Holdings, said the deal with Wuthelam would "strengthen its balance sheet", and was expected to result in a 0.6 % increase in profit margins and earnings per share growth of over 10%.

The Japanese firm will remain listed, and its top shareholder Wuthelam will not sell the company, said Masaaki Tanaka, chief executive officer of Nippon Paint Holdings.

The firm noted growing demand for paint in applications including residential and commercial construction, and infrastructure such as bridges and roads.

It said it expects the deal to be finalised in January, and that it will need to be cleared by regulators in each of the markets where the businesses operate.

Nippon Paint was advised by Nomura and Wuthelam worked with Bank of America.

($1 = 105.5000 yen)

(Reporting by Chris Gallagher, Ritsuko Ando, Kane Wu, Scott Murdoch and Ju-min Park; Editing by Clarence Fernandez and Christopher Cushing & Simon Cameron-Moore)


ę Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
BANK OF AMERICA CORPORATION 0.41% 41.86 Delayed Quote.38.11%
NIPPON PAINT HOLDINGS CO., LTD. 0.85% 1656 End-of-day quote.-26.92%
NOMURA CO., LTD. -1.96% 952 End-of-day quote.11.74%
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Financials
Sales 2021 956 B 8 711 M 8 711 M
Net income 2021 83 702 M 763 M 763 M
Net Debt 2021 294 B 2 679 M 2 679 M
P/E ratio 2021 44,6x
Yield 2021 0,64%
Capitalization 3 888 B 35 420 M 35 430 M
EV / Sales 2021 4,37x
EV / Sales 2022 4,08x
Nbr of Employees 27 318
Free-Float 42,5%
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Technical analysis trends NIPPON PAINT HOLDINGS CO., LTD.
Short TermMid-TermLong Term
TrendsNeutralBearishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 7
Average target price 1 708,57 JPY
Last Close Price 1 656,00 JPY
Spread / Highest target 53,4%
Spread / Average Target 3,17%
Spread / Lowest Target -43,8%
EPS Revisions
Managers and Directors
NameTitle
Masaaki Tanaka Chairman, President & Chief Executive Officer
Yuichiro Wakatsuki CFO & Senior Managing Executive Officer
Yasuyuki Matsumoto Chief Administration Officer & Head-Personnel
Hisashi Hara Independent Outside Director
Takashi Tsutsui Independent Outside Director
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