Continuing to narrow its focus on its coatings business, PPG Industries Inc. announced Monday that it was selling its majority 51 percent stake in Transitions Optical to its partner in the venture, France's Essilor International, for about $1.73 billion in cash.
Transitions, the Pinellas Park, Fla.-based company that makes plastic lenses that adapt to changing light allowing eyeglasses to automatically tint in sunlight, was a growth engine for PPG for two decades but because of rapidly changing technology would be better off with a company focused on the optical industry, PPG CEO Charles Bunch said in a statement.
The transaction is not expected to have any impact on jobs in the Pittsburgh region, where the Downtown-based company employs about 2,000, spokesman Bryan Iams said in an email.
PPG said it would remain a supplier of optical materials to the lens industry, including to Essilor, which will enter into multi-year agreements for PPG to keep supplying it with optical dyes and research and development services.
In January, PPG disclosed that it was in discussions with Essilor about whether one of them might buy the other's interest in Transitions.
PPG plans to use the proceeds from the divestiture, which is expected to close in the first half of next year, on acquisitions and share repurchases, Mr. Bunch said. Those moves are expected to more than offset the reduced earnings from the divestiture, he said.
PPG suspended share repurchases at the beginning of the second quarter because of negotiations with Essilor. It said Monday it was restarting the buybacks with a targeted range of $500 million to $750 million for the year.
Transitions, which was launched in 1990, had sales of about $800 million in 2012.
Besides Transitions, the deal with Essilor includes the sale of Intercast, a maker of sunglasses based in Parma, Italy, that PPG acquired in April 2006.
The deal includes a $75 million termination fee for PPG if the transaction takes too long to close or does not win approval from regulators, according to a filing PPG made with the Securities and Exchange Commission Monday.
PPG, which has shed some old-line businesses in recent years, including automotive glass, focuses primarily on paint and other coatings. Last year, it had sales of $15.2 billion and profit of $941 million.
Shares of PPG rose $4.06, or 2.58 percent, to close Monday at $161.17.
Patricia Sabatini: firstname.lastname@example.org or 412-263-3066. First Published July 29, 2013 10:30 AM