Berkshire Hathaway to acquire 8.7% in Axalta Coating Systems for $560 mn

Warren Buffett's investment company Berkshire Hathaway Inc today said that it plans to acquire an 8.7-per cent stake in automotive coatings maker Axalta Coating Systems Ltd for $560 million.

This will be Warren Buffett's second investment in a paint maker after it acquired Benjamin Moore & Co in 2000 for $1 billion.

Berkshire Hathaway intends to acquire 20 million shares from private equity firm The Carlyle Group at $28 per share.

Under the terms of the agreement, Berkshire Hathaway will hold the stake for a minimum of 90 days.

Carlyle Group acquired DuPont Performance Coatings in 2012 for $4.9 billion and renamed the company as Axalta Coating Systems.

Carlyle took Axalta through an initial public offering of 50,000,000 or a 45-per cent stake last year and now holds about 46 per cent  after its current sale of 8.7 per cent to Berkshire Hathaway.

From its initial $4.9-billion investment in Axalta, Carlyle has already made $2.9 billion from the IPO and the stake sale to Berkshire Hathaway. 

Wilmington, Delaware-based Axalta Coating, established 90 years ago, is the world's leading manufacturer and supplier of coating systems primarily for the transportation industry covering automobile, aviation and marine sectors.

Axalta Coating's four production segments, refinish, OEM, industrial liquid and powder, are considered to be one of the highest quality paint providers for the auto industry. The company has manufacturing facilities in six continents, serving more than 120,000 customers in 130 countries. 

Axalta chairman and CEO, Charlie Shaver, said, "Berkshire is the type of quality investor that Axalta has been fortunate to attract since our IPO last year.''

"We believe this investment shows Berkshire's support of our strategy to reshape ourselves into a growth and customer oriented, world class coatings company."