Industrials

Expanding DuluxGroup’s growth ambitions with Japan’s biggest paint maker

~$A4.2 billion sale of an iconic Australian consumer products company.1

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Sector Industrials
Sub-sector Retail
Location Australia

Opportunity

In early 2019, Nippon Paint Holdings Co., Ltd (‘Nippon’) made an acquisition proposal to ASX-listed DuluxGroup Limited (‘DuluxGroup’) under a scheme of arrangement subject to DuluxGroup shareholder approval. The acquisition would provide Nippon with the leading player in the Australian paints and coatings market whilst providing DuluxGroup with an enhanced ability to pursue its global growth ambitions, leveraging Nippon’s global scale and resources.

Approach

Macquarie Capital acted as exclusive financial adviser to DuluxGroup in relation to the Nippon proposal. Macquarie's strong and longstanding relationship with DuluxGroup, extending back to DuluxGroup's listing on the ASX in 2010, strongly positioned the DuluxGroup Board of Directors to respond to Nippon's proposal quickly and effectively.

Outcome

Following negotiations, the recommended scheme of arrangement proposal was strongly supported by DuluxGroup shareholders, with the premium valuation representing the highest valuation multiple paid in the global paints and coatings sector.

16.1x EV / EBITDA valuation multiple

highest multiple paid in the global paints and coatings sector

~446 per cent total shareholder return since demerger

placing DuluxGroup in the top 5 per cent in the S&P / ASX 200 index2

Overwhelming shareholder support

97.6 per cent of shareholder scheme voted in favour

  1. Implied market capitalisation derived from $A9.80 per DuluxGroup share multiplied by 389.3 million DuluxGroup shares on issue and enterprise value includes DuluxGroup net debt (inclusive of USPP hedge) of $A340.5 million and minority interest of $A2.7 million as at 30 September 2018.
  2. Total shareholder return information sourced from Bloomberg and S&P / ASX 200 index (as at 12 July 2010) sourced from FactSet.

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