Axalta Acquires CoverFlexx Group to Expand Automotive Refinish Business

Axalta Coating Systems acquires The CoverFlexx Group from Transtar Holding Company for $285 million plus a $10 million earnout. The deal strengthens Axalta's position in the automotive refinish and aftermarket coatings market, particularly in North America.

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Nitish Verma
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Axalta Acquires CoverFlexx Group to Expand Automotive Refinish Business

Axalta Acquires CoverFlexx Group to Expand Automotive Refinish Business

Axalta Coating Systems, a leading global coatings company, has entered into a definitive agreement to acquire The CoverFlexx Group from Transtar Holding Company for an initial cash consideration of $285 million, plus an additional $10 million earnout based on the business's 2024 performance. The acquisition is expected to close in the third quarter of 2024, pending regulatory approval and other customary closing conditions.

Why this matters: This acquisition strengthens Axalta's position in the automotive refinish and aftermarket coatings market, which has significant implications for the global automotive industry. The deal also highlights the growing trend of consolidation in the coatings industry, which may lead to changes in market dynamics and competition.

The CoverFlexx Group manufactures and sells coatings for automotive refinish and aftermarket applications, focusing on economy customers in North America. The business offers a wide range of products, including primers, basecoats, clearcoats, aerosols, fillers, bedliners, detailing products, and paint shop accessories. Established brands of The CoverFlexx Group include Transtar Autobody Technologies, Pro Form, and Aftermkt Armor products.

The company generated revenue of $78 million in 2023 and operates with over 120 employees across facilities in Brighton, Michigan, and Milton, Ontario. Chris Villavarayan, Axalta's Chief Executive Officer and President, commented on the acquisition, stating, "This acquisition aligns with our ongoing investment in Axalta's Refinish business. We believe The CoverFlexx Group's value-based solutions are an excellent complement to Axalta's portfolio of offerings."

Troy Weaver, Axalta's President, Global Refinish, added, "We are excited to have The CoverFlexx Group join the Axalta family. We expect the additional brands and capabilities will provide significant value to our customers and will further support the growth of our Refinish business."

The acquisition of The CoverFlexx Group is a strategic move for Axalta, as it strengthens the company's position in the automotive refinish and aftermarket coatings market, particularly in North America. With the addition of The CoverFlexx Group's brands and capabilities, Axalta aims to enhance its offerings and provide greater value to its customers in the refinish business segment.

Key Takeaways

  • Axalta acquires The CoverFlexx Group for $285M + $10M earnout.
  • The deal strengthens Axalta's position in automotive refinish and aftermarket coatings.
  • The CoverFlexx Group generates $78M in revenue with 120+ employees.
  • The acquisition adds economy-focused brands to Axalta's portfolio.
  • The deal is expected to close in Q3 2024, pending regulatory approval.