Sherwin-Williams buys Mexican paint maker

Sherwin-Williams, the US paint manufacturer, on Monday announced that it had agreed to buy Mexico’s largest paint producer in a deal worth about $2.4bn, including debt.

The all-cash purchase of Consorcio Comex, a privately owned Mexican company, will help Sherwin-Williams expand its presence in North America amid an improving outlook for the US housing market.

Following the announcement, Sherwin-Williams’ shares rose more than 6 per cent before closing 5.8 per cent higher at $149.06. The shares have gained more than 60 per cent since January.

The Cleveland-based company, which last year reported net sales of $8.77bn, said that improving conditions helped boost third-quarter consolidated net sales to a record $2.6bn, an increase of 4.8 per cent compared with the same period of 2011.

Its purchase of Comex, which is subject to regulatory approvals, should significantly increase the company’s presence in the Americas as well as strengthen its position in several regions of the US, in particular the western states.

Comex, whose sales last year totalled $1.4bn, sells primarily architectural paint in Mexico through 3,300 points of sale and in the US under several brands sold through 240 company-operated outlets.

The paint group also has a presence in Canada through 78 company-operated outlets and about 1,500 independent paint dealers. It has eight manufacturing sites in Mexico, five in the US and three in Canada.

HSBC acted as financial advisor to Comex, while Goldman Sachs advised Sherwin-Williams.