PPG, the Pittsburgh-based global leader in paint and coatings (by revenue; Sherwin-Williams is #2), announced this morning that it is selling its U.S. and Canada architectural coatings unit to American Industrial Partners, a U.S. private equity group. Selling price is $550 million.

The move is not unexpected, as PPG previously announced plans to restructure, including the sale of its U.S. paint division.

This follows another divestiture from PPG of its Silicas business in late August.

In addition to offloading the architectural coatings business, PPG also announced a cost-reduction program across the U.S. and Europe that it says will shave off $175 million in operating costs once fully implemented.

Those reductions will mainly target European operations and will include closing facilities and targeting other fixed costs. PPG also says the cuts will impact about 1,800 jobs, which means layoffs are to come.

“We are pleased to reach an agreement with American Industrial Partners and believe the business is well positioned to leverage its current positive momentum, leading brands, proven innovation, established customers, and dedicated and talented employees,” PPG CEO Tim Knavish said in a press release.

So who is American Industrial Partners? Like so many businesses have experienced, AIP is a private investment firm.

AIP has made more than 125 acquisitions to date and specializes in corporate divestitures and management buyouts of established businesses with sales greater than $500 million. Note that this buyout was at $550 million, though the unit was previously valued at upwards of $800 million by analysts at Barclays.

It’s of note that American Industrial Partners was founded in 1988 by a group of former CEOs who had lost their jobs following the takeover of their companies. Unlike some private equity groups who are known for pillaging companies quickly before selling them again, AIP has a history of maintaining a company’s current leadership and avoiding the heavy debt load that some PE groups apply.

PPG also announced its third quarter results, which were lackluster.

The company reported year-over-year EPS (earnings per share) comparisons were down by 8 cents as a result of higher income tax rates. Annual sales volume ticked upward at 2% in the Performance and Coatings segment, offsetting constrained demand in the Industrial Coatings unit.

“Looking ahead, we maintain our full-year 2024 sales and EPS guidance, expecting organic sales to be flat and adjusted earnings per share to be at the low end of the $8.15 to $8.30 range,” Knavish concluded. “The pending closure of the silicas products business divestiture and the architectural coatings U.S. and Canada strategic review reflects the execution of our enterprise growth strategy to focus our resources on businesses where we have the greatest growth and margin opportunities.”