The Valspar Corp. (NYSE:VAL) has announced that the company will be acquired by Sherwin-Williams (NYSE:SHW) for $113 per share, equivalent to an enterprise value of approximately $11.3 billion. Shares of Valspar jumped about 25% during Monday pre market session.
The two companies explained the reasoning behind the deal, claiming that there are a lot complementary traits. John Morikis, president and CEO of Sherwin-Williams Co., 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, including a scale platform to grow in Asia-Pacific and EMEA… Sherwin-Williams will continue to be headquartered in Cleveland and we intend to maintain a significant presence in Minneapolis.”
The transaction is expected to be closed by first quarter of 2017. Analysts estimate that the combined company will have a full year 2015 of revenues of $15.6 billion, and EBITDA of $2.8 billion. Once the transaction is complete, Sherwin-Williams estimates that the new combined company will realize about $320 million in cost synergies.