“While these decisions are difficult, they are necessary to adjust our fixed cost base and to right-size our company,” Tim Knavish, PPG chairman and CEO, said in a prepared statement — pointing to two recently-announced business divestitures.
Also on Thursday, PPG announced that it had agreed to sell all of its U.S. and Canadian architectural coatings business — which houses brands like Liquid Nails, Glidden and Olympic and made up $2 billion in net sales for PPG last year — to private equity firm American Industrial Partners. The sale, expected to close in late 2024 or early 2025, is valued at $550 million.
And in August, PPG agreed to sell its silicas products business to Poland-based QEMETICA S.A. for about $310 million. That transaction is also still pending.
Thursday's announcement of layoffs and its latest business divestiture arrives shortly after a disappointing earnings report for PPG. The company on Wednesday reported third-quarter net income of $468 million, or $2.13 per share, on revenue of $4.58 billion. Results fell short of Wall Street expectations.
PPG's recent cuts also arrive amid an environment of poor home sales. Existing U.S. home sales slipped 2.5% in August, the latest month with data available, as prices increased on an annual basis for the 14th consecutive month. And the average rate on a 30-year mortgage surged to 6.32% last week, although that's still well below 2024's peak of 7.22% in May.
Both PPG and AIP struck an optimistic note about Thursday's agreement. Rick Hoffman, partner at AIP, said that the firm was “thrilled to be acquiring a storied business with a heritage dating back 125 years.” And Knavish said such divestitures “further optimize” PPG's portfolio by aiding growth in the company's strongest areas.