Libang's acquisition of Dorothy may be just the beginning!

Recently, Libang Coatings announced the purchase of Australian Dorothy for A$3.8 billion. It is understood that Lebanon Coatings agreed to buy Dulux Group for A$9.80 per share, which valued the Australian company at A$3.8 billion. Dorothy closed Tuesday at A$7.67, which means a premium of 28%.

Maybe when you see the news, you will be surprised to ask: Libang has bought Dorothy? No, because the Dulux Group is not Akzo Nobel's Dulux brand. Dorothy Australia is an Australian and New Zealand paint, coatings, sealants and adhesives company. The main terminal market focuses on residential areas, focusing on the maintenance and improvement of existing residential areas. On May 28, 1918, BALM Coatings was registered in New South Wales, Australia. From then on, it began a 100-year development process until today's Dorothy Group. In 1933, BALM acquired the right to use the Dulux registered trademark in Australia and introduced the latest advanced coating technology from DuPont. Australian Dorothy has long occupied the position of Australia's largest paint manufacturer. Australian Dorothy ranked 15th with $939 million in sales in the 2018 Top Companies of Top Coatings Manufacturers published by Coatings World magazine.

Talk about the acquisition Now let's go back to the content of this acquisition. The price of Libang Coatings is A$9.80 per share, with a 27.8% premium on Tuesday's closing price of more Rox. The announcement also shows that Australian Dorothy's equity value is 3.8 billion US dollars, and the implied corporate value is 4.2 billion US dollars. The two world-class companies choose to cooperate in a group, which has a leading significance for the development of the industry. Dorothy said the acquisition would "provide more opportunities" for the company to achieve its growth ambitions. The board of directors of Dorothy Group said that in the absence of priority proposals, it concluded that the plan was in the best interests of the shareholders of Dorothy Group, based on the constraints of the independent expert's report. The Dorothy Group unanimously recommended that shareholders vote in favour of the plan. Shareholders of both companies will vote on the deal in July. Driven by the news, Dorothy shares surged 27.6% Wednesday.

Dorothy Australia has a leading and iconic brand and world-class manufacturing equipment. The merger of Dorothy Group and Japan will provide a broader market. According to Durox Group's 2018 financial report, Durox earned $1.84 billion in sales revenue in 2018, up 3.3% year-on-year; sales revenue increased by 4.5% excluding the stripped Chinese paint business; profit before interest, tax depreciation and amortization was $257.7 million; profit before interest and tax increased by 42% to $223.2 million year-on-year; net profit after tax increased by 54% to $150.7 million year-on-year. After the acquisition of Australian Dorothy by Lebanon, on the one hand, it can take advantage of the original brand influence and channel market of Australian Dorothy to occupy a part of the market share, on the other hand, it can integrate the operational experience of Australian Dorothy and gradually lay out the global market in the future.

In fact, the editor is not very surprised about the acquisition of Australian Dorothy Group by Lebanon. After all, in recent years, Libang has made many acquisitions. Xiaobian lists the acquisitions of Libang in the past three years. On September 7, 2016, Libang China reached a strategic cooperation agreement with Runfa Coatings Group, a well-known enterprise in China's furniture and lacquer industry. The two sides issued a joint statement saying that 6:4 equity allocation formed strategic cooperation. It is reported that Chang Runfa, founded in 1999, is a large-scale enterprise specializing in research, development, production and sales of wood coatings. It is also a well-known Chinese furniture paint enterprise. Its headquarters is located in Shenzhen. Huizhou, Beijing, Shanghai, Chengdu and other places have four modern paint/resin production bases and sales service companies including Shunde, Dongguan, Jinan, Harbin, Xi'an and so on. After this cooperation, the two sides will work together to promote the innovation and development of the Chinese furniture paint market.

In July 2017, Changrunfa Coatings, which belongs to Libang, acquired more than 90% of the shares of Huarun Zibo and became the de facto controlling shareholder. The acquisition time was from May to June 2017. Zibo Huarun Coating Technology Co., Ltd., its business scope is: polyester polyurethane wood coatings, synthetic resin emulsion, internal (external) wall coatings, waterborne wood coatings, waterborne coatings production, technology research and development, and sales. Its brands include Chios and Garde Bowman. Chang Runfa's acquisition of Zibo Huarun or the important strategy of water-based and UV wood lacquer for Libang layout. On November 29, 2018, the media reported that Nippon Paint HD would first acquire two Chinese paint companies in early 2019, namely Shanghai Mecca Coatings Co., Ltd. and Nantong Coatings Co., Ltd. Libang will acquire 70% of the shares of the two companies through its subsidiaries in China. The acquisition was not announced, and the total sales of the two companies were about 13.5 billion yen. In short, Libang will further purchase coatings from all over the world, launch product portfolio, acquire new markets by promoting mergers and acquisitions, and accelerate the development of new markets... It is imperative for Libang to acquire mergers and acquisitions all over the country.