Platinum sues PPG for new deal terms

Buyout firm Platinum Equity says it wants to renegotiate its planned $500-million purchase of PPG Industries Inc.’s automotive glass unit, alleging that the paint maker had misrepresented the health of the business.

In a lawsuit filed Wednesday, Beverly Hills-based Platinum asked a New York state court to cancel its agreement to buy PPG Automotive Glass & Services, contending that PPG hid forecasts showing the business would face lower sales and higher costs than PPG management had presented during negotiations.

“We’re ready, willing and able to complete the transaction, and we remain very interested in acquiring the AG&S; unit -- as long as the terms fairly reflect the state of the business,” Platinum spokesman Mark Barnhill said in an e-mail.

Platinum, led by billionaire Tom Gores, has acquired more than 70 companies since its founding in 1995. It retains 21 of those in its portfolio, with total revenue last year of $8 billion.

A spokesman for Pittsburgh-based PPG said that Platinum’s claims had no merit and that PPG would defend itself against the suit.

According to the suit, PPG said the automotive glass unit’s sales in 2008 would be $1.1 billion, and earnings before interest, taxes, depreciation and amortization would be $140 million. Before the accord was signed, PPG cut the sales forecast by $168 million and the profit outlook by $54 million without telling Platinum, the suit says.

PPG also understated pension liabilities and failed to disclose that lost orders would require closing factories in Evart, Mich., and Hawkesbury, Canada, at a cost of as much as $50 million, according to the suit.

Platinum asked the court to cancel a $25-million payment it previously agreed to make to PPG if it backed out of the deal.

PPG shares fell $1.26 to $70.60.