Kohlberg picks up shattered Platinum glass deal

Paint and coating supplier PPG has agreed to the divestment of its auto glass business for $330m in cash and equity, roughly $170m less than the price tag on a failed Platinum Equity deal still in court.

Middle-market private equity firm Kohlberg & Company has agreed to acquire the auto glass unit of paint and coating supplier PPG for $330 million (€211 million) in cash and equity, roughly $170 million less than what Platinum Equity bid for the business last year.

Under the terms of the divestiture, expected to close in the third quarter of the year, PPG will retain a 40 percent in its automotive glass and services business, which supplies windshields, rear and side windows, and sunroofs for car and truck makers. After buyouts of former minority interests and other fees and taxes, Pittsburgh-based PPG will receive approximately $270 million in cash.

Mount Kisco, New York-based Kohlberg will gain control of the auto glass unit’s nine manufacturing plants, as well as its insurance claim services, which has offices in Florida and Kentucky. Combined, the businesses employ roughly 4,400 people.

Kohlberg could not be reached for comment.

The $330 million price tag is considerably lower than the $500 million deal Beverly Hills-based Platinum Equity and PPG agreed in September. Kohlberg lost out to Platinum during that bidding war.

The Platinum deal fell apart last year when the Tom Gores-led firm filed a lawsuit alleging PPG had misrepresented the health of the auto glass business. Platinum sued to exempt the firm from paying a $25 million break-up fee and to collect compensatory damages from PPG. The case is currently being heard in New York state court.

A spokesman for PPG said that the reduced price of the Kohlberg deal should not affect any ongoing litigation.

“We deny their adverse allegations and are seeking payment of the breakup fee under contract,” the spokesman told PEO.

Kohlberg is currently investing its sixth fund, which it closed on a record $1.5 billion in March. The firm typically invests in companies valued from $100 million to $500 million, with a portfolio geared towards the manufacturing and consumer sector.