Nippon Paint Holdings Co. agreed to acquire specialty chemicals maker AOC for $2.3 billion, marking its largest overseas acquisition as the Japanese coatings manufacturer seeks to expand its presence in high-margin specialty materials.
The Tokyo-based company will purchase AOC from private equity firm Lone Star Fund XI, adding a Tennessee-based producer of unsaturated polyesters and vinyl esters used in construction, infrastructure and transportation industries.
The deal gives Nippon Paint a stronger foothold in the US and European specialty chemicals markets. AOC reported sales of $1.5 billion in 2023, with EBITDA of $528 million, highlighting the company’s strong profitability in specialty formulations.
The acquisition fits into Nippon Paint’s “Asset Assembler” strategy of pursuing both organic growth and strategic takeovers. The company expects the purchase to boost earnings per share immediately after closing, which is planned for the first half of 2025.
The Japanese firm will fund the purchase through bank loans rather than issuing new shares. Bank of America Securities led the financial advisory team for the transaction.
A temporary transfer of AOC’s Indian subsidiary will occur before closing due to regulatory requirements, with plans to reintegrate it once approvals are secured.
