Disclosure

Investor Relations (IR)
2021.10.29

Notice of Acquisition of Shares of DP JUB delniška družba pooblaščenka d.d. by Our Indirectly Owned Subsidiary (Conversion to an Indirectly Owned Subsidiary)

#Investor Relations #timely disclosure

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October 29, 2021
Company:Nippon Paint Holdings Co., Ltd. Representative:Yuichiro Wakatsuki
Representative Executive Officer & Co-President
Wee Siew Kim
Representative Executive Officer & Co-President
(Code No.: 4612; TSE 1st Section)
Contact:Ryosuke Tanaka,
 General Manager of Investor Relations
(TEL +81-50-3131-7419)

Notice of Acquisition of Shares of
DP JUB delniška družba pooblaščenka d.d.
by Our Indirectly Owned Subsidiary
(Conversion to an Indirectly Owned Subsidiary)

Nippon Paint Holdings Co., Ltd. (NPHD) has decided that DuluxGroup Limited (DuluxGroup), its consolidated subsidiary, will acquire shares of DP JUB delniška družba pooblaščenka d.d. (JUB) and JUB’s subsidiaries, etc. to make them indirectly owned subsidiaries of NPHD (the “Acquisition”). JUB manufactures and sells decorative paints, External Thermal Insulation Composite Systems (ETICS) and other paint-related products in Central and Eastern Europe. DuluxGroup has entered into a conditional share sale and purchase agreement.
The Board of Directors of NPHD decided during its meeting held on October 5, 2021 to entrust the decision-making on the signing of the share transfer agreement to the Representative Executive Officers & Co-Presidents. Since all conditions have been met, we have decided to formally conclude the agreement on October 29, 2021.

1. Reasons for the acquisition of shares

The Nippon Paint Group is pursuing Maximization of Shareholder Value as its ultimate objective. Toward achieving this goal, our New Medium-Term Plan has set targets to achieve revenue growth that outpaces the market’s growth in our operating regions by promoting growth strategies in our operating regions and businesses based on Powerful Partnerships among our Group companies. In addition, we are aggressively pursuing M&A activities by leveraging the high growth potential and stable cash flows of the paint market to entrench sustainable growth and further increase market presence around the world.

The European paint market is the world’s second largest*1 following the China market and has prospects for continuing steady growth. JUB is a manufacturer of decorative paints, ETICS and other paint-related products, with a market presence and an extensive distribution network in Central Europe centered on Slovenia, Serbia, Croatia, and Bosnia and Herzegovina. JUB is one of the market leaders in interior paints in Slovenia, Croatia, and Bosnia and Herzegovina and in façade paints in Slovenia, Serbia, and Bosnia and Herzegovina, commanding a market leading position.

The Acquisition will allow JUB to better use its extensive distribution network and recognized brands in Central Europe under the Nippon Paint Group to create synergies with DuluxGroup and other Group companies. By taking these actions, the Nippon Paint Group will aim to build a bridgehead for the decorative paints, ETICS and the paint related businesses in the Central and Eastern European markets.

The Acquisition is expected to contribute to be EPS accretive from the first year of acquisition. The shares of JUB will be acquired by DGL International (UK) Ltd, a company newly established in the U.K. by DuluxGroup, using funds provided by NPHD through borrowings from financial institutions. NPHD is not proposing to raise equity funding.

*1 Source: Global Market Analysis for the Paint & Coatings Industry (2019-2024) published by American Coatings Association https://paint.org/market

2. Overview of our indirectly owned subsidiary acquiring shares of JUB

(1) NameDGL International (UK) Ltd
(2) AddressSuite 1, 3rd Floor, 11-12 St James's Square, London SW1Y 4LB UK
(3) Names and positions of representativesAndrew John Ryan, Director
Richard Paul Stuckes, Director
(4) Description of businessA holding company
(5) Stated capitalNot Applicable*2
(6) Date of establishmentOctober 4, 2021
(7) Major shareholders and ownership ratioDuluxGroup (Investments) Pty Ltd: 100%
(8) Relationship with the listed companyCapital relationshipThe Company indirectly owns 100% of the shares of DGL International (UK) Ltd

*2: Capital stock is not determined yet because the relevant company is newly established and is undergoing various procedures associated with company establishment.

3. Overview of our indirectly owned subsidiaries to be transferred

(1) DP JUB delniška družba pooblaščenka d.d.

(1) NameDP JUB delniška družba pooblaščenka d.d.
(2) AddressDol pri Ljubljani 28, 1262 Dol pri Ljubljani, Slovenija
(3) Names and positions of representativesSašo Kokalj, Director
(4) Description of businessA holding company
(5) Stated capitalEUR 2,5 mn (JPY 334 mn)
(6) Date of establishmentMarch 24, 1998
(7) Major shareholders and ownership ratioŠtefan Hoyer: 6.13%
Zlata Zgonc Hoyer: 5.35%
Tatjana Habič Logar: 4.63%
Darij Velkavrh: 4.54%
Others: 79.34%
(8) Relationship with the listed companyCapital relationshipNot applicable
Personnel relationshipSome of the owners are employees, former employees or family members of employees, and former employees of JUB d.o.o.
Transactional relationshipNot applicable
(9) Management results and financial situation over the last three years*3Fiscal year endedDecember 2018December 2019December 2020
Total equityEUR 60 mn
(JPY 7,863 mn)
EUR 65 mn
(JPY 8,518 mn)
EUR 75 mn
(JPY 9,829 mn)
Total assetsEUR 92 mn
(JPY 12,057 mn)
EUR 97 mn
(JPY 12,712 mn)
EUR 95 mn
(JPY 12,450 mn)
Net salesEUR 111 mn
(JPY 14,547 mn)
EUR 113 mn
(JPY 14,809 mn)
EUR 115mn
(JPY 15,071 mn)
Income before taxesEUR 4 mn
(JPY 524 mn)
EUR 8 mn
(JPY 1,048 mn)
EUR 13 mn
(JPY 1,704 mn)
ProfitEUR 3 mn
(JPY 393 mn)
EUR 6 mn
(JPY 786 mn)
EUR 9 mn
(JPY 1,179 mn)
Dividend per share---

*3: DP JUB d.d, Group - consolidated figures that include DP JUB d.d., JUB kemična industrija d.o.o and its subsidiaries.

(2) JUB kemična industrija d.o.o.

(1) NameJUB kemična industrija d.o.o.
(2) AddressDol pri Ljubljani 28, 1262 Dol pri Ljubljani, Slovenia
(3) Names and positions of representativesSašo Kokalj, Managing Director
Dragan Stajić, Managing Director
Mitja Cesar, Managing Director
(4) Description of businessManufacturer of paints and coatings
(5) Stated capitalEUR 5,28 mn (JPY 692 mn)
(6) Date of establishmentNovember 19, 2007
(7) Major shareholders and ownership ratioDP JUB D.D.: 87.70%
Štefan Hoyer: 2.38%
Zlata Zgonc Hoyer: 2.04%
Darij Velkavrh: 1.89%
Others: 5.99%
(8) Relationship with the listed companyCapital relationshipNot applicable
Personnel relationshipSome of the owners are employees, former employees or family members of employees, and former employees.
Transactional relationshipNot applicable
(9) Management results and financial situation over the last three years*4Fiscal year endedDecember 2018December 2019December 2020
Total equityEUR 58 mn
(JPY 7,601 mn)
EUR 62 mn
(JPY 8,125 mn)
EUR 72 mn
(JPY 9,436 mn)
Total assetsEUR 92 mn
(JPY 12,057 mn)
EUR 97 mn
(JPY 12,712 mn)
EUR 95 mn
(JPY 12,450 mn)
Net salesEUR 111 mn
(JPY 14,547 mn)
EUR 113 mn
(JPY 14,809mn)
EUR 115 mn
(JPY 15,071 mn)
Income before taxesEUR 4 mn
(JPY 524 mn)
EUR 8 mn
(JPY 1,048mn)
EUR 13 mn
(JPY 1,704 mn)
ProfitEUR 4 mn
(JPY 524 mn)
EUR 7 mn
(JPY 917 mn)
EUR 11 mn
(JPY 1,442 mn)
Dividend per share---

*4: JUB d.o.o. Group and its subsidiaries consolidated.

4. Overview of the Sellers

(1) NameIndividual investors
(2) Relationship between the company and the sellersEmployees, former employees and other

5. Status of ownership ratio before and after the transfer

(1) Ownership ratio before the transfer
  • DP JUB delniška družba pooblaščenka d.d.: 0.0%
  • JUB kemična industrija d.o.o.: 0.0%
(2)Equity interest to be transferred
  • DP JUB delniška družba pooblaščenka d.d.: 99.8%
  • JUB kemična industrija d.o.o.: 99.8%*5
(3) Acquisition priceEUR 194.5mn (JPY 25,489mn)
(4) Ownership ratio after the transfer
  • DP JUB delniška družba pooblaščenka d.d.: 99.8%
  • JUB kemična industrija d.o.o.: 99.8%*5

*5: Including the shares owned by DP JUB delniška družba pooblaščenka d.d.

6. Schedule

(1) Date of resolution by the board of directorsOctober 29, 2021 (today)
(2) Date of execution of the Share Purchase AgreementsOctober 29, 2021 (today)
(3) Closing date of the Share TransferH1 2022 (scheduled)

7. Future Outlook

The date of execution of the share transfer is scheduled for H1 2022. As a result, we expect that the impact of the transaction on our earnings for the fiscal year ending December 31, 2021 will be insignificant.


Note:The exchange rate used to prepare this document is EUR 1.0 = JPY 131.05, which is the same exchange rate used to calculate the revision of the consolidated earnings forecast for the fiscal year ending December 31, 2021 released on October 12, 2021.



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