Fortune 500 paint company Sherwin-Williams Co. will spend $2.4 billion, including debt, to buy Mexican paint business Consorcio Comex as the real estate market shows signs of improvement.
Comex brought in sales of $1.4 billion last year by selling architectural and industrial coatings throughout Mexico, Canada and the U.S. The company has eight factories in Mexico, five in the U.S. and three in Canada.
The acquisition will help Sherwin-Williams “significantly increase” its presence in markets where its store count is low, said Chief Executive Christopher M. Connor in a statement.
The gradually recovering real estate market could boost demand for paint products: New residential construction starts boomed 15% in September to their highest annual rate in more than four years, the Commerce Department said last month.
Sherwin-Williams was founded in 1866 and owns brands such as Dutch Boy, Krylon and Minwax. The company operates 4,000 stores and also sells brands through auto retailers, hardware stores and home improvement chains such as Lowe’s and Home Depot.
Sherwin-Williams stock was up more than 5% in morning trading Monday to $149.62 a share. Share prices were wobbly throughout the recession but began inching up in 2010 and 2011 before surging up in 2012. The stock has soared more than 60% from a year ago.
Last month, the company said its third quarter revenue rose 4.8% to $2.6 billion. Net income jumped nearly 31% to $234.9 million, or $2.24 a share.