Auto-paint supplier seeks $1 billion from IPO, report says

Axalta is targeting annual revenue of about $7 billion by 2018.

NEW YORK (Bloomberg) -- Axalta Coating Systems, the former auto-paint unit of DuPont Co., is working with Citigroup Inc. and Goldman Sachs Group Inc. on an initial public offering in the U.S., people familiar with the matter told Bloomberg.

Axalta, backed by private-equity firm Carlyle Group LP, may raise about $1 billion in the offering, said the people, who asked not to be named because the process is private. The timing hasn’t been set, the people said. 

An IPO would mark a quick turnaround for Axalta, which Carlyle bought in February 2013 for $4.9 billion. The Philadelphia-based company is targeting revenue of $7 billion by 2018, a 63 percent jump from the $4.3 billion it posted in 2012, CEO Charlie Shaver said last year.

Matthew Winokur, a spokesman for Axalta, declined to comment on the company’s plans for an IPO, as did Chris Ullman, a spokesman for Carlyle. Representatives for Citigroup and Goldman Sachs also declined to comment.

Carlyle’s acquisition of Axalta was funded by the private-equity firm’s fifth U.S. buyout fund and third European LBO pool. Carlyle agreed to pay at least 10 times the company’s earnings before interest, taxes, depreciation and amortization.

In January, Axalta was seeking to reduce the rate on about $2.8 billion of loans it obtained to support the buyout, a person with knowledge of the situation said then.

DuPont, which had been in the auto-paints market since the introduction of the motor car, decided to exit the business as part of a shift to other industries such as food and biofuels. Carlyle assumed Axalta’s unfunded European pension liabilities, raising the transaction value to $5.15 billion -- the biggest deal in the coatings industry in at least a decade, according to data compiled by Bloomberg.

Carlyle, founded in 1987 by Bill Conway, Dan D’Aniello and David Rubenstein, has snapped up corporate orphans since it started buying defense companies in the aftermath of the fall of the Berlin Wall. The firm, which besides leveraged buyouts also manages hedge funds, credit investments and real estate, oversaw $203 billion in assets as of June 30.

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