Shareholders to Receive TWD 56 Per Share in
Cash, a 17.28% Premium to July 20 Closing Price
Existing Management Team Will Continue to Lead
Company with Support from KKR
Partnership Provides Greater Access to Capital
and Operational Resources to Undertake Growth Opportunities in
Taiwan and Around the World
LCY Chemical Corp. (“LCY” or the “Company”) (TPE: 1704) and
global investment firm KKR today announced the signing of a share
exchange agreement for a consortium led by KKR to acquire all of
the issued and outstanding shares of LCY for TWD 56 per share in
cash, adjusted to include a TWD 2.90 per share dividend (rounded to
the nearest TWD 0.01) (ex-dividend offer price is TWD 53.10 per
share). The transaction, which has been unanimously approved by the
board of directors of LCY upon the recommendation of its Audit
Committee comprising independent directors, represents a total
market capitalization of approximately TWD 47.8 billion (USD 1.56
billion).
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The offer price represents a premium of 17.28% to LCY’s closing
price on 20 July 2018, the last trading day prior to the
transaction announcement. It also represents a premium of 19.2%,
23.0% and 24.3% over the 30-day, 90-day and 180-day average closing
prices, respectively.1
Mr. TH Hong, Chairman of LCY, said, “The proposed transaction
delivers meaningful and immediate value to our shareholders, while
also providing greater access to capital, operational resources and
the time horizon needed to execute a strategy to drive long-term,
sustainable value creation. KKR is the ideal partner to help us
build on our 50-year track record of producing high-quality
chemical products for customers worldwide and take LCY to its next
level of growth given KKR’s focus on responsible business and
operational excellence. KKR’s decision to partner with us is a
testament to the innovative and talented team we have built in
Taiwan – and around the world – and we look forward to working with
them to build an even stronger company.”
Mr. Paul Yang, Member and Head of KKR Greater China, said, “LCY
is a global leader in the specialty chemical industry and has
earned its place as one of Taiwan’s leading global companies. We
believe that KKR’s partnership approach will enable LCY to make the
necessary investments in R&D and other growth initiatives to
maintain the technological capabilities, capacity and product
differentiation needed to further the Company’s leadership position
going forward. This is an exciting opportunity to work alongside
LCY’s exceptional management and dedicated employees to help the
Company take full advantage of the opportunities that lie
ahead.”
Founded in 1965, LCY is a producer of specialty chemicals with a
concentration on thermoplastic elastomers and performance plastics
used in infrastructure, health care, household, automotive, textile
and electronic products, among other diverse applications. LCY will
maintain its corporate headquarters in Taipei, its existing global
distribution and sales networks and its production plants in
Taiwan, mainland China and the United States.
KKR is a global investment firm with over 42 years of experience
partnering with management teams and helping them to create value
as a long-term, patient investor. Following completion of the
transaction, KKR intends to work closely with LCY's existing
management team and employees to strengthen the Company's business
platform by exploring expansion opportunities in new and existing
international markets as well as penetrating new verticals, with a
goal to grow and support employment in Taiwan and overseas. KKR
also looks to enhance the Company’s approach to environmental,
social and governance management to responsibly and sustainably
grow LCY's corporate value.
Immediately following consummation of the share swap, KKR will
hold a majority and controlling interest in LCY. The KKR consortium
includes participation by the Company’s current employees and
certain members of the Founding Family.
KKR makes its proposed investment from its Asian Fund III. The
transaction is expected to close in the fourth quarter of 2018,
subject to customary closing conditions and regulatory approvals.
Upon the completion of the transaction, LCY will become a private
company, and its shares will no longer be traded on the Taiwan
Stock Exchange. KKR and its partners are committed to supporting
LCY’s global expansion and will evaluate a range of options to
support the Company’s strategy, including capital market activities
in Taiwan.
Baker & McKenzie is acting as legal advisor to the Company.
Simpson Thacher & Bartlett and Lee & Li are acting as legal
advisors to KKR and the consortium. Goldman Sachs (Asia) L.L.C. is
acting as financial advisor to KKR. Goldman Sachs Bank USA has
agreed to underwrite and arrange debt financing to the consortium
for the share exchange transaction, subject to certain customary
conditions.
About LCY Chemical Corp.
Founded in 1965, LCY CHEMICAL CORP (TWSE:1704) aims at improving
the quality of life and has been in petrochemical business for more
than 50 years. Product portfolios include methanol, solvents,
electronic-grade chemicals, rubbers and performance plastics. For
more details, visit LCY CHEMICAL CORP. website:
http://www.lcygroup.com/lcy/en/.
About KKR
KKR is a leading global investment firm that manages multiple
alternative asset classes, including private equity, energy,
infrastructure, real estate and credit, with strategic manager
partnerships that manage hedge funds. KKR aims to generate
attractive investment returns for its fund investors by following a
patient and disciplined investment approach, employing world-class
people, and driving growth and value creation with KKR portfolio
companies. KKR invests its own capital alongside the capital it
manages for fund investors and provides financing solutions and
investment opportunities through its capital markets business.
References to KKR's investments may include the activities of its
sponsored funds. For additional information about KKR &
Co. Inc. (NYSE:KKR), please visit KKR's website
at www.kkr.com and on Twitter @KKR_Co.
Forward-Looking Statements
This press release contains forward-looking statements,
including but not limited to statements about completing the
proposed transaction on the terms and timetable described above,
and strategic or other potential benefits of the proposed
transaction. Words such as “will,” “believes,” “expects,” and
“future” or similar expressions are intended to identify
forward-looking statements. These forward-looking statements are
subject to the inherent uncertainties in predicting future results
and conditions. Certain factors could cause actual results to
differ materially from those projected in these forward-looking
statements, and investors should not place undue reliance on such
statement. These forward-looking statements speak only as of the
date of this press release, and KKR and the Company do not
undertake any obligation to update or revise any of the
forward-looking statements to reflect future events or
circumstances, except as required by law.
1 The figures set out above are based on Bloomberg data as of
the last full trading day immediately prior to the date of the
announced share swap.
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version on businesswire.com: https://www.businesswire.com/news/home/20180722005024/en/
For LCY Chemical Corp.Charles Wei+886 2-2763-1611+886
983-051-488Charles.wei@lcygroup.comorJames Kuo+886 2-2763-1611+886
900-797-195James.kuo@lcygroup.comorCompass PR (For LCY Chemical
Corp.)June Kuo+886 936-140-606june.kuo@compasspr.com.tworOlivia
Hsieh+886 912-429-786olivia.hsieh@compasspr.com.tworFor KKRKKR
AsiaAnita Davis+852 3602-7335Anita.Davis@KKR.comorKKR
AmericasKristi Huller / Cara Major+1
212-750-8300Media@KKR.comorSard Verbinnen & Co. (For KKR
Asia)Miles Radcliffe-Trenner+852 3842-2200KKR-SVC@sardverb.com
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