Mergers & Acquisitions
June 13, 2023
Possible SKpucore Divestiture by SKC
Korea’s SKC in talks to sell polyol subsidiary SK pucore to private equity firm
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| [Courtesy of SKC] |
SKC Corp., a South Korean polyethylene terephthalate (PET) film manufacturer, will sell its polyol subsidiary SK pucore Co. to a private equity firm in a move to liquidate assets to focus on chips and secondary battery materials business.
According to multiple sources from the investment bank industry on Monday, SKC is currently in talks to sell SK pycore to Glenwood Private Equity for about 500 billion won ($390 million).
The two companies recently signed a memorandum of understanding and are expected to sign a contract soon after conducting due diligence.
Samil PricewaterhouseCoopers is known to lead the sales as financial adviser of the buyer.
The deal is expected to be valued at about 10 times the last year‘s earnings before interest, taxes, depreciation, and amortization (EBITDA), which stood at 48.8 billion won.
SK pucore, formerly MCNS, which was jointly established by SKC and Japan’s Mitsui Chemicals Inc. in 2015, produces polyols, a raw material for polyurethane.
The partnership with Mitsui Chemicals ended in 2021 and the company changed its name. SK pucore has a dominant position in the domestic polyol market. Last year, it accounted for 40 percent of the entire market.
The sale comes as SKC is hoping to stack cash for investments and improve financial health.
SKC announced to invest 1.8 trillion won to strengthen its semiconductor and secondary battery materials business capacity. SKC is also in the process of acquiring semiconductor testing company ISC Co. for about 400 billion won.
SKC’s net debt to EBITDA was more than 6 times in the first quarter of this year, up from 3.5 times in 2021. The company’s net debt stood at 3.6 trillion won as of the first quarter.
Glenwood PE is a mid-sized private equity fund manager in Korea. It recently acquired the diagnostics division of LG Chem Ltd. and is the second-largest shareholder of Hanwha Advanced Materials Corp. and CJ Olive Young Corp.
Glenwood PE, in particular, manages PI Advanced Materials Co., which it previously acquired from SKC. The latest deal is expected to create synergy.
Polyurethanes manufactured through SK pucore’s flagship product, polyols, are utilized in a wide range of downstream industries, including automotive, fashion, electronics, and medical devices.
The company has more than 450 customers, more than 130 distribution partners, and production facilities in five countries. Last year, SK pucore raised 32.4 billion won in operating profit on sales of 720.6 billion won.
The company has secured future growth engines recently by developing eco-friendly polyol products. Customers return waste polyols to SK pucore, and the company makes recycled polyols from them and supplies them back to customers. The company is also accelerating the production of bio-polyols based on vegetable oils.
The investment bank industry is observing whether SKC will continue to secure more assets to build a portfolio that centers on new businesses.
“This year, we plan to strengthen the competitiveness of our core businesses by expanding global expansion and sales of copper foil and increasing the proportion of high-value-added products in our semiconductor and chemical businesses,” said SKC Chief Executive Officer Park Won-cheol in March.
“We will expand new growth businesses through active additional mergers and acquisitions.”
The company also sold its film division to private equity firm Hahn & Company for 1.6 trillion won last year.
Some critics, however, raise concerns about the sales being carried out by SKC as the M&A market is still unstable.
“We are concerned that the company is selling assets in a rush when the buyer has more power,” said an industry insider. “The company is desperate to secure liquidity but it should also be considered that it may send an excessive signal to the market that SKC’s financial situation is unstable.”
June 7, 2023
Univar Shareholders Approve Sale
Univar Solutions Stockholders Approve Acquisition by Apollo Funds
News provided by Univar Solutions Inc.
06 Jun, 2023, 16:15 ET
DOWNERS GROVE, Ill., June 6, 2023 /PRNewswire/ — Univar Solutions Inc. (NYSE: UNVR) (“Univar Solutions” or the “Company”), a leading global solutions provider to users of specialty ingredients and chemicals, announced today that its stockholders have voted at a special meeting of Univar Solutions stockholders (the “Special Meeting”) to approve the Company’s pending acquisition by funds managed by affiliates of Apollo (NYSE: APO). Under the terms of the merger agreement, Univar Solutions stockholders will receive $36.15 per share in cash for every share of Univar Solutions common stock they own immediately prior to the effective time of the merger.
At the Special Meeting, approximately 93.6% of the shares voted were voted in favor of the merger, which represented approximately 81.3% of the total outstanding shares of Univar Solutions common stock as of May 1, 2023, the record date for the Special Meeting.
Univar Solutions Stockholders Approve Acquisition by Apollo Funds
“We are pleased that our stockholders overwhelmingly supported our transaction with Apollo,” said Chris Pappas, chairman of the Univar Solutions Board of Directors. “We now shift our focus to the important next steps toward completing the transaction and maximizing value for Univar Solutions stockholders.”
Assuming timely satisfaction of necessary closing conditions, the transaction is expected to close in the second half of 2023.
The final voting results on the proposals voted on at the special meeting will be set forth in a Form 8-K filed by Univar Solutions with the U.S. Securities and Exchange Commission.
May 9, 2023
Tempur Sealy to Buy Mattress Firm
Leading Global Bedding Company Tempur Sealy to Acquire Mattress Firm, the Nation’s Largest Mattress Specialty Retailer
May 09, 2023 6:36 AM ETTempur Sealy International, Inc. (TPX)
– Significantly Expands Consumer Touchpoints and Accelerates U.S. Omni-Channel Strategy
– Simplifies Consumer Purchase Journey and Facilitates Innovation
– Streamlines Operations and Drives Adjusted EPS Accretion
– Tempur Sealy (TPX) to Host Conference Call to Discuss First Quarter 2023 Results and the Transaction at 8:00 a.m. Eastern Time Today, May 9th
LEXINGTON, Ky., May 9, 2023 /PRNewswire/ — Tempur Sealy International, Inc. (NYSE: TPX, “Company” or “Tempur Sealy”) and Mattress Firm Group Inc. (“Mattress Firm”) today announced that Tempur Sealy has signed a definitive agreement to acquire Mattress Firm, the nation’s largest mattress specialty retailer, in a cash and stock transaction valued at approximately $4.0 billion.
The transaction is expected to be funded by approximately $2.7 billion of cash consideration (subject to adjustments, including the repayment of Mattress Firm’s debt and other customary items) and $1.3 billion in stock consideration issued to Mattress Firm shareholders, reflecting the issuance of 34.2 million shares of common stock based on the closing share price of $37.62 as of May 8, 2023. The transaction is currently anticipated to close in the second half of 2024, subject to the satisfaction of customary closing conditions, including applicable regulatory approvals. Following the close of the transaction, Mattress Firm is expected to operate as a separate business unit within the Company.
Founded in 1986, Mattress Firm is the largest mattress specialty retailer in the U.S., operating over 2,300 brick-and-mortar retail locations and a growing e-commerce platform. Mattress Firm’s more than 6,200 highly trained retail sales associates provide personalized service to help consumers choose the ideal bedding products across their robust assortment of market-leading brands.
This combination will complement Tempur Sealy’s extensive product development and manufacturing capabilities with vertically integrated retail. Together, Tempur Sealy and Mattress Firm’s combined global footprint will include approximately 3,000 retail stores, 30 e-commerce platforms, 71 manufacturing facilities, and 4 state-of-the-art R&D facilities worldwide. These combined operations will be supported by more than 21,000 best-in-class employees with a collective focus on providing breakthrough sleep solutions to consumers in over 100 countries.
Tempur Sealy Chairman and CEO Scott Thompson said, “This transaction advances all four of our key long-term initiatives: to develop the highest quality bedding products, promote brands with compelling marketing, optimize our diverse omnichannel distribution platform, and drive EPS growth. Consistent with our M&A strategy, this acquisition will make Tempur Sealy more competitive by bringing us closer to consumers and facilitating continued innovation.”
Thompson concluded, “We are excited by the long-term growth prospects for our global vertically integrated Company. This combination will accelerate our growth trajectory and enhance operating cash flow. Mattress Firm has been a valued retail partner for more than 35 years, and we look forward to welcoming their talented workforce of more than 8,100 employees to the Tempur Sealy family.”
Mattress Firm CEO John Eck said, “We know that every customer has unique needs and wants when it comes to a sleep solution that is perfect for them. As part of Tempur Sealy, our customers will benefit from our combined portfolio of highly recognized brands and products, extensive omni-channel capabilities, industry leading innovation and best-in-class teams. Under Tempur Sealy’s leadership, our combined company will be in a unique position to take advantage of our shared values and complementary capabilities to better address consumers’ needs and drive growth.”
Strategic Rationale
The combination with Mattress Firm is expected to enhance Tempur Sealy’s ability to meet consumers’ needs, expand growth opportunities, and streamline operations.
We expect to leverage the individual strengths of Tempur Sealy and Mattress Firm to realize six strategic benefits through this acquisition.
- Expanding Consumer Touchpoints. Mattress Firm’s and Tempur Sealy’s combined consumer touchpoints will create opportunities to keep pace with consumers’ evolving preferences. Being closer to the U.S. bedding consumer will also broaden opportunities to develop lifetime relationships with consumers.
- Accelerating U.S. Omni-Channel Strategy. Mattress Firm’s more than 2,300 brick-and-mortar retail stores, robust e-commerce capabilities, and sleep education and sleep tracking platforms complement Tempur Sealy’s direct-to-consumer operations, enabling a seamless omni-channel ecosystem that meets the needs of more consumers nationwide.
- Simplifying the Consumer Purchase Journey. This combination facilitates targeted marketing efforts to drive incremental brand awareness through blended advertising and share of voice, and enhance consumer understanding of bedding innovation, including health and wellness benefits. Further, the combination brings together Tempur Sealy’s and Mattress Firm’s highly trained retail sales and customer service teams to expand customer service capabilities, facilitate improved consumer outcomes, and simplify the consumer purchase journey.
- Facilitating Consumer-Centric Innovation. The alignment of new product development and testing will enable a more targeted, end-to-end innovation approach and enhances opportunities to invest in, test, and refine new sleep technologies.
- Streamlining Operations and Enhances Supply Chain Management. Enhanced visibility to consumer demand creates opportunities for more agile and fortified supply chain management. Combined scale and vertically integrated infrastructure across the combined company drives operational efficiencies across logistics, transportation, warehousing, supply chain planning, sourcing, and product development, streamlining the order-to-delivery process for all customers.
- Driving Adjusted EPS Accretion. Tempur Sealy has a strong track record of creating long-term value from highly strategic M&A activities. This acquisition is expected to be accretive to adjusted EPS before synergies in the first year post close. Adjusted for the impact of run-rate synergies, this acquisition is expected to deliver low double digit adjusted EPS accretion.
Cost Synergies
Tempur Sealy expects to begin realizing synergies by the end of year two after closing and to realize at least $100 million in annual run-rate synergies by the end of year four after closing. The Company expects to achieve synergies by leveraging its global scale and vertically integrated infrastructure to drive efficiencies through logistics, product lifecycle management, manufacturing optimization, and sourcing initiatives.
Transaction Overview
Under the terms of the agreement, Tempur Sealy will purchase Mattress Firm for an enterprise value of approximately $4.0 billion. The transaction is expected to be funded by approximately $2.7 billion of cash consideration (subject to adjustments including the repayment of Mattress Firm’s debt and other customary items.) and $1.3 billion in stock consideration issued to Mattress Firm shareholders, reflecting the issuance of approximately 34.2 million shares of Tempur Sealy common stock based on the closing price of $37.62 per share as of May 8, 2023. Following the transaction, Mattress Firm’s and Tempur Sealy’s shareholders will own approximately 16.6% and 83.4% of the combined company, respectively, based on the Company’s shares outstanding at the time of signing. Tempur Sealy expects to expand its existing Board of Directors by appointing two mutually-agreed Mattress Firm directors to the Tempur Sealy Board following the closing of the transaction.
Tempur Sealy plans to fund the cash portion of the transaction using a combination of cash on hand and proceeds from a combination of new secured and unsecured financing, a portion of which will be used to repay Mattress Firm’s outstanding debt. The combined company’s expected net leverage at closing per the Company’s credit agreement after giving effect to the transaction is expected to be between 3.0x and 3.25x adjusted EBITDA. Tempur Sealy expects to return to its net leverage target range of 2.0x to 3.0x adjusted EBITDA in the first 12 months after closing, supported by the increased earnings and free cash flow outlook of the combined company.
Timing and Approvals
The transaction has been approved by the board of directors of Tempur Sealy and Mattress Firm. Mattress Firm shareholders holding more than 80% of Mattress Firm’s outstanding shares have signed voting agreements in support of the transaction. The transaction does not require Tempur Sealy shareholder approval.
The transaction is expected to close in the second half of 2024, subject to the satisfaction of customary closing conditions and applicable regulatory approvals, including receipt of clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
The Company has received a request for additional information and documentary material from the Federal Trade Commission (“FTC”) in connection with the FTC’s review of the transaction. The Company expects to work cooperatively with the FTC to complete the acquisition.
May 1, 2023
M&A Troubles
Insulation specialist Recticel thunders 24 percent lower on stock market
04/28/2023 | 05:41am EDT
Copyright BusinessAMBE
Investors dumped Recticel shares after disappointing quarterly results and uncertainty over the sale of its Engineered Foam division to U.S.-based Carpenter.
In the news: Recticel anticipates a significant decline in its operating cash flow (ebitda) in 2023, with the market environment remaining volatile. The company reported this with the release of its quarterly results.
- Demand in the first quarter remained well below last year in almost all product segments. “The market is expected to remain volatile with little near-term visibility,” Recticel stated.
- In the first quarter of 2023, the European construction market remained very challenging due to high inflation and interest rates, according to the company. “Declining disposable income, coupled with expensive building materials, has further weakened the market.”
- Kepler Cheuvreux analysts expected volumes to decline only from the second quarter onward, with the pace of decline increasing in the second quarter. “But it is clear that the market weakness has come earlier than expected,” Kepler said.
- Kepler also expects pressure on margins, as insulation specialists usually cut prices to maintain volumes. On the other hand, raw material prices remain relatively high.
Even more uncertainty: Analysts also point to uncertainty surrounding the sale of Engineered Foam to Carpenter.
- The American candidate acquirer wants a substantial discount from the original price of 656 million euros, due to recent market developments, which Kepler says calls into question the deal, as the price paid was reasonable.
- Recticel says it is still considering all options.
Stock market reaction: On the Brussels Stock Exchange, s share price closed Thursday at 15.92 euros. That went down to some 12 euro, or almost a quarter less, in an initial reaction this morning.
© The Content Exchange, source News
April 14, 2023
Total to Sell PolyBD Business
TotalEnergies’ Cray Valley Affiliate Sells Three Product Lines to Pacific Avenue Capital Partners
Published: April 11, 2023 at 6:00 a.m. ET
Regulatory News:
TotalEnergies (Paris:TTE) (LSE:TTE) (NYSE:TTE) has accepted an offer from Pacific Avenue Capital Partners for the acquisition of three product lines (Wingtack(R), PolyBD(R) and Dymalink(R)) developed by Cray Valley, its resin production and sales affiliate. The transaction includes four production sites in the United States, the Cray Valley Italy affiliate and the portfolio of customers.
The transaction will allow Cray Valley to focus on its global specialty C4 and pure-monomer resin businesses which will continue to be developed by TotalEnergies. Production of the Ricon(R), Krasol(R) and Cleartack(R) resins will continue at Carling (France), in accordance with the commitments made when the site was restructured in 2013, Grand Junction (US) and Kralupy (Czech Republic).
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About Cray Valley
TotalEnergies’ Cray Valley affiliate is a global supplier of specialty chemical additives, hydrocarbon specialty chemicals, and liquid or solid tackifying resins used to make adhesives, rubbers, polymers, coatings and other materials. As a pioneer in the development of these advanced technologies, Cray Valley has already brought hundreds of performance-enhancing products to market for demanding applications in a range of sectors (energy, printing, packaging, construction, tires, electronics, etc.). Cray Valley’s European headquarters, at the Carling Saint-Avold platform, is home to its customer service, a research and development center, and production units. For more information, visit www.crayvalley.com.
For more information, visit www.crayvalley.com
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