LEHIGH VALLEY, Pa.,
May 6, 2016 /PRNewswire/ -- Air
Products (NYSE: APD), a world-leading industrial gases company,
announced that it has signed a definitive agreement today to sell
the Performance Materials Division (PMD) of its Materials
Technologies segment to Evonik Industries AG (EVK.DE), a world
leader in specialty chemicals and materials, for $3.8 billion in cash.
The sale of PMD is expected to close before the end of 2016, and
is subject to regulatory approvals and customary closing
conditions. Under the terms of the agreement, operational
facilities, supplier contracts, labs, contracts, customers, and
employees and certain legal entities associated with PMD would
transfer to Evonik. Evonik intends to continue to run PMD from
Allentown, Pennsylvania.
Air Products also intends to spin-off its Electronic Materials
Division (EMD) to shareholders as a separate public company, called
Versum Materials. Air Products is on track to separate EMD by the
end of September 2016 and will
continue to evaluate whether debt and equity market conditions are
favorable for a tax-free spin-off.
Air Products has been consistently executing against its
strategic, Five-Point Plan, which includes focusing on industrial
gases and taking actions on non-core businesses. In September 2015, the Company announced plans to
separate Materials Technologies, which includes PMD and EMD.
"The sale of PMD is consistent with the long-term strategy for
Air Products that we announced in September
2014," said Air Products' Chairman, President and Chief
Executive Officer, Seifi Ghasemi. "I am very pleased that PMD has a
great future ahead of it as a core business of a company which is
even larger than Air Products.
"As for the balance of our Materials Technologies segment, I am
also very excited about the future of EMD, which we currently
intend to spin-off as a new, world-class public company named
Versum Materials. Guillermo Novo
will be the CEO of the new company, and I will be non-executive
chairman of Versum Materials while maintaining my current roles at
Air Products.
"As a result of these moves, Air Products will be in an even
stronger position to take advantage of the exciting investment
opportunities to grow our core Industrial Gases business," Ghasemi
said.
About PMD
PMD generated $1.04
billion in revenue and $241
million of Adjusted EBITDA over the last twelve months
ending March 31, 2016*. PMD had
$244 million of Adjusted EBITDA in
fiscal 2015*. PMD consists of epoxy curing agents (40 percent of
revenues), polyurethane additives (32 percent) and specialty
additives businesses (28 percent). PMD has approximately 1,100
employees and includes major production facilities in the U.S.,
Germany, the United Kingdom, China and Japan. PMD products provide distinct,
performance-enhancing benefits in use across the construction,
marine, automotive, industrial cleaning, and other markets.
About EMD
EMD generated $974
million in revenue and $351
million of adjusted EBITDA over the last twelve months
ending March 31, 2016*. EMD consists
of advanced materials (35 percent of revenues), process materials
(39 percent) and delivery systems (26 percent). EMD has
approximately 1,900 employees and includes major production
facilities in the U.S., Korea and Taiwan. EMD's focus is to be the materials
partner of choice for the semiconductor industry, providing low
cost/high value in use products for next generation chips used in
mobile devices, Internet of Things, and PCs.
*Financial information for divisions that comprise the Materials
Technologies segment reported within Air Products; no allocated
corporate costs. Based on non-GAAP measures.
Conference Call Details:
The teleconference on Friday, May 6,
2016 at 12:00 p.m. USET will
be open to the public and the media in listen-only mode by
telephone and Internet broadcast.
Live teleconference: 913-312-0699
Passcode: 9240687
Internet broadcast: Available on the Event Details page on
Air Products' Investor Relations web site.
Telephone replay: 888-203-1112 or 719-457-0820
(international)
Passcode: 9240687
This will be available from 4:00 p.m.
USET on May 6 through 4:00 p.m. ET on May
13.
Internet replay: Available on the Event Details page on Air
Products' Investor Relations web site.
Advisors
Lazard acted as sole financial advisor to Air
Products. Skadden, Arps, Slate, Meagher & Flom LLP acted as
lead counsel for Air Products.
About Air Products
Air Products (NYSE:APD) is a world-leading Industrial Gases company
celebrating 75 years of operation. The company's core Industrial
Gases business provides atmospheric and process gases and related
equipment to manufacturing markets, including refining and
petrochemical, metals, electronics, and food and beverage. Air
Products is also the world's leading supplier of liquefied natural
gas process technology and equipment. The company's Materials
Technologies business serves the semiconductor, polyurethanes,
cleaning and coatings, and adhesives industries.
The company had fiscal 2015 sales of $9.9
billion and was ranked number 284 on the Fortune 500 annual
list of public companies. Approximately 20,000 employees in 50
countries strive to make Air Products the world's safest and best
performing Industrial Gases company, providing sustainable
offerings and excellent service to all customers. For more
information, visit www.airproducts.com.
About Evonik
Evonik, the creative industrial group
from Germany, is one of the world
leaders in specialty chemicals. Profitable growth and a sustained
increase in the value of the company form the heart of Evonik's
corporate strategy. Its activities focus on the key megatrends
health, nutrition, resource efficiency and globalization. Evonik
benefits specifically from its innovative prowess and integrated
technology platforms. Evonik is active in over 100 countries around
the world. In fiscal 2015 more than 33,500 employees generated
sales of around €13.5 billion and an operating profit (adjusted
EBITDA) of about €2.47 billion.
NOTE: This news release contains "forward-looking
statements" within the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 including
statements regarding the expected timetable for completing the
sale of PMD to Evonik, benefits and synergies of the proposed
transaction, future opportunities for the combined company and
products, future financial performance and any other statements
regarding the Company's and Evonik's future expectations, beliefs,
plans, objectives, financial conditions, or performance that are
not historical facts; statements about the Company's plans
for completion of the EMD spin-off, the expected benefits of the
spin-off, the tax free nature of the spin-off, the prospects for
the independent companies following the spin-off and the timing of
the transaction. These forward-looking statements are based on
management's reasonable expectations and assumptions as of the date
of this release. Actual results may differ materially from the
expectations expressed in the forward-looking statements because of
many factors not anticipated by management, including, without
limitation, additional timing required to consummate the
proposed sale of PMD; inability to satisfy the conditions to
closing of the proposed sale of PMD; the risk that a regulatory
approval that may be required for the proposed sale of PMD is not
obtained or is obtained subject to conditions that are not
anticipated or other events that prevent the closing of the
proposed transaction from occurring; the ultimate timing, outcome
and results of integrating the operations of Air Products' and
Evonik's Performance Materials divisions; the effects of the
business combination, including the combined company's future
financial condition, results of operations, strategy and plans;
expected synergies and other benefits from the proposed transaction
and the ability of Evonik to realize such synergies and other
benefits; the Company's ability to obtain regulatory
approvals necessary to effect the spin-off of EMD, our ability to
fully realize the anticipated benefits of the spin-off, negative
effects of the announcement or the consummation of the proposed
spin-off on the market price of the Company's common stock,
significant transaction costs and or unknown liabilities, general
economic and business conditions that affect the companies in
connection with the proposed spin-off, changes in capital market
conditions, future opportunities that the Company's board may
determine present greater potential to increase shareholder value
than spin-off, the ability of our companies to operate
independently following the spin-off; the impact of credit rating
agencies or tax authority actions or other factors on the cash
proceeds the Company expects to derive from the transactions; and
other risk factors described in the Company's Form 10-K for its
fiscal year ended September 30, 2015.
The Company disclaims any obligation or undertaking to disseminate
any updates or revisions to any forward-looking statements
contained in this document to reflect any change in assumptions,
beliefs or expectations or any change in events, conditions, or
circumstances upon which any such forward-looking statements are
based.
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(Millions of dollars unless otherwise
indicated)
The news release includes discussion of non-GAAP financial
measures, including Adjusted EBITDA. The presentation of non-GAAP
measures is intended to enhance the usefulness of financial
information by providing measures which management uses internally
to evaluate our operating performance.
We use non-GAAP measures to assess our operating
performance by excluding certain disclosed items that we believe
are not representative of our underlying business. We believe
non-GAAP financial measures provide investors with meaningful
information to understand our underlying operating results and to
analyze financial and business trends. Non-GAAP financial measures,
including Adjusted EBITDA, should not be viewed in isolation, are
not a substitute for GAAP measures, and have limitations which
include but are not limited to:
- Depreciation and amortization represent the wear and tear
and/or reduction in value of the plant, equipment, and intangible
assets which permit us to manufacture and/or market our
products.
- Other companies may define non-GAAP measures differently than
we do, limiting their usefulness as comparative measures.
A reader may find any one or all of these items important
in evaluating our performance. Management compensates for the
limitations of using non-GAAP financial measures by using them only
to supplement our GAAP results to provide a more complete
understanding of the factors and trends affecting our business. In
evaluating these financial measures, the reader should be aware
that we may incur expenses similar to those eliminated in this
presentation in the future.
Presented below are reconciliations of the GAAP results to
the non-GAAP measures:
|
|
|
|
|
|
Quarter
Ended
|
|
|
Mar-16
|
Materials
Technologies Segment
|
|
FY
2015
|
|
|
Jun-15
|
|
|
Sep-15
|
|
|
Dec-15
|
|
|
Mar-16
|
|
|
LTM
|
Operating
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance
Materials
|
$
|
213.9
|
|
$
|
57.8
|
|
$
|
50.3
|
|
$
|
44.1
|
|
$
|
59.5
|
|
$
|
211.7
|
|
Electronics
Materials
|
|
265.8
|
|
|
76.9
|
|
|
63.0
|
|
|
83.3
|
|
|
70.3
|
|
|
293.5
|
|
Non
Divisional
|
|
(3.0)
|
|
|
(3.2)
|
|
|
3.1
|
|
|
(.2)
|
|
|
(.5)
|
|
|
(.8)
|
Total Operating
Income
|
$
|
476.7
|
|
$
|
131.5
|
|
$
|
116.4
|
|
$
|
127.2
|
|
$
|
129.3
|
|
$
|
504.4
|
|
Add: Depreciation and
amortization
|
|
92.8
|
|
|
22.7
|
|
|
22.8
|
|
|
19.6
|
|
|
20.0
|
|
|
85.1
|
|
Add: Equity
Affiliates' Income
|
|
2.2
|
|
|
.3
|
|
|
.6
|
|
|
.4
|
|
|
.2
|
|
|
1.5
|
Adjusted
EBITDA
|
$
|
571.7
|
|
$
|
154.5
|
|
$
|
139.8
|
|
$
|
147.2
|
|
$
|
149.5
|
|
$
|
591.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
Mar-16
|
Performance
Materials
|
|
FY
2015
|
|
|
Jun-15
|
|
|
Sep-15
|
|
|
Dec-15
|
|
|
Mar-16
|
|
|
LTM
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating
Income
|
$
|
213.9
|
|
$
|
57.8
|
|
$
|
50.3
|
|
$
|
44.1
|
|
$
|
59.5
|
|
$
|
211.7
|
|
Add: Depreciation and
amortization
|
|
29.0
|
|
|
7.3
|
|
|
6.9
|
|
|
6.9
|
|
|
7.5
|
|
|
28.6
|
|
Add: Equity
Affiliates' Income
|
|
1.2
|
|
|
.3
|
|
|
.3
|
|
|
.2
|
|
|
.2
|
|
|
1.0
|
Adjusted
EBITDA
|
$
|
244.1
|
|
$
|
65.4
|
|
$
|
57.5
|
|
$
|
51.2
|
|
$
|
67.2
|
|
$
|
241.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
Mar-16
|
Electronic
Materials
|
|
FY
2015
|
|
|
Jun-15
|
|
|
Sep-15
|
|
|
Dec-15
|
|
|
Mar-16
|
|
|
LTM
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating
Income
|
$
|
265.8
|
|
$
|
76.9
|
|
$
|
63.0
|
|
$
|
83.3
|
|
$
|
70.3
|
|
$
|
293.5
|
|
Add: Depreciation and
amortization
|
|
63.8
|
|
|
15.4
|
|
|
15.9
|
|
|
12.7
|
|
|
12.5
|
|
|
56.5
|
|
Add: Equity
Affiliates' Income
|
|
1.0
|
|
|
-
|
|
|
.3
|
|
|
.2
|
|
|
-
|
|
|
.5
|
Adjusted
EBITDA
|
$
|
330.6
|
|
$
|
92.3
|
|
$
|
79.2
|
|
$
|
96.2
|
|
$
|
82.8
|
|
$
|
350.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/air-products-to-sell-performance-materials-division-of-its-materials-technologies-segment-to-evonik-for-38-billion-300264308.html
SOURCE Air Products