Berkshire Hathaway buys nearly 10% stake in Axalta for $560M

Berkshire Hathaway Inc. will pay $560 million for a nearly 10 percent stake in Philadelphia-based Axalta Coating Systems Ltd., which has seen its stock rise more than 36 percent since it went public last fall.

Axalta makes high-performance coating systems for use on vehicles and in industrial markets.

Axalta said Tuesday that Berkshire would pay $28 per share to buy 20 million shares of Axalta from Carlyle Group, the private equity firm, which will still hold a 45 percent stake. Axalta won't receive proceeds from the sale.

Berkshire's price is a slight discount to the stock's closing price of $28.33 on Monday. Axalta shares rose 9.81 percent Tuesday, closing at $31.10, up $2.78.

Berkshire, led by Warren Buffett, owns companies in several industries, including utilities and energy, freight rail transportation, and insurance. It agreed not to dispose of Axalta's shares for 90 days after the sale is completed, and Axalta will provide Berkshire with certain registration rights after that window.

"Berkshire is the type of quality investor that Axalta has been fortunate to attract since our IPO last year," Axalta chief executive officer Charlie Shaver said in a statement.

With $4.39 billion in revenue last year, Axalta is the world's biggest supplier of coatings to auto-repair shops and the second-largest provider to manufacturers of cars and light trucks.

Berkshire owns Lubrizol, the maker of lubricants, and has a stake in Precision Castparts Corp., a manufacturer of aerospace components. Berkshire also owns Benjamin Moore, which sells paint for use in buildings.

Carlyle bought Axalta from the DuPont Co. in February 2013 for $4.9 billion, investing $1.35 billion of equity. DuPont's strategy was to focus on faster-growing businesses such as agricultural chemicals.

Axalta went public in November with an initial offering of 50 million shares. Its stock closed at $20.75 on its first trading day.