PQ Group Holdings Advances Portfolio Strategy: Enters Agreement to Sell Performance Materials & Launches Strategic Alternativ...
October 15 2020 - 4:15PM
Business Wire
PQ Group Holdings Inc. (NYSE:PQG), a leading integrated and
innovative global provider of specialty catalysts, materials and
chemicals and services, announced today that it entered into a
definitive agreement to sell its Performance Materials business for
a purchase price of $650 million to an affiliate of The Jordan
Company, L.P. (“TJC”), a U.S. middle-market private equity firm
(www.thejordancompany.com) that was founded in 1982.
“The planned sale of Performance Materials at an attractive
valuation marks a significant milestone on our ‘Simpler and
Stronger’ strategic path, as we target a portfolio reflecting both
higher top-line growth and higher margins,” said Belgacem Chariag,
PQ’s Chairman, President and Chief Executive Officer.
“Our end goal for the Simpler and Stronger plan is to focus PQ
on its high-growth, high-margin Catalysts and Refining Services
businesses. This focused portfolio is well positioned to use its
technology and service offerings to help customers drive
sustainability by more efficiently producing the lightweight
polymers and clean fuels that are expected be in high demand going
forward. As a result, we are also launching a review of strategic
alternatives for Performance Chemicals – a healthy business with
customers and attributes that are distinct from our Catalysts and
Refining Services segments.”
Chariag added, “Finally, given our strong cash generation and
expected proceeds, we are expanding our capital allocation policy
beyond reinvestment and debt reduction to now include special
dividends.”
The company expects to use after tax cash proceeds from the sale
of its Performance Materials business, along with a portion of
existing cash balances, to reduce debt by approximately $460
million while also allocating up to $250 million, or $1.84 per
share, to a planned special dividend to shareholders that is
subject to board approval and declaration.
The sale of Performance Materials is anticipated to close by the
end of 2020, subject to regulatory approvals and customary closing
conditions.
Goldman Sachs & Co., LLC and Harris Williams LLC are serving
as financial advisors and Ropes & Gray LLP is serving as legal
counsel, to PQ. Kirkland & Ellis LLP is serving as legal
counsel for TJC.
PQ management will host a conference call and audio-only webcast
on Friday, October 16, 2020 at 8:30 a.m. ET to discuss the
transaction. Investors may listen to the conference call live via
telephone by dialing 1 (877) 883-0383 (domestic) or 1 (412)
902-6506 (international) and use the participant code 8073226. A
live audio webcast of the conference call and presentation
materials can be accessed at http://investor.pqcorp.com. A replay
of the conference call/webcast will be made available at
http://investor.pqcorp.com/events-presentations.
Investor Contact: Nahla A. Azmy (610) 651-4561
Nahla.Azmy@pqcorp.com
About PQ Group Holdings Inc.
PQ Group Holdings Inc. and subsidiaries is a leading integrated
and innovative global provider of specialty catalysts, materials,
chemicals and services. We support customers globally through our
strategically located network of manufacturing facilities. We
believe that our products, which are predominantly inorganic, and
services contribute to improving the sustainability of the
environment. We have four uniquely positioned specialty businesses:
Refining Services provides sulfuric acid recycling to the
North American refining industry; Catalysts serves the
packaging and engineering plastics and the global refining,
petrochemical and emissions control industries; Performance
Materials produces transportation reflective safety markings
for roads and airports; and Performance Chemicals supplies
diverse product end uses, including personal and industrial
cleaning products, fuel efficient tires, surface coatings, and food
and beverage products.
We serve over 4,000 customers globally across many end uses and
operate over 70 manufacturing facilities which are strategically
located across six continents. For more information, see our
website at https://www.pqcorp.com.
Note on Forward-Looking Statements
Some of the information contained in this press release
constitutes “forward-looking statements.” Forward-looking
statements can be identified by words such as “anticipates,”
“intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,”
“projects” and similar references to future periods.
Forward-looking statements are based on our current expectations
and assumptions regarding our business, the economy and other
future conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict. Examples of
forward-looking statements include, but are not limited to,
statements regarding the sale of the Performance Materials business
segment and the review of strategic alternatives for the
Performance Chemicals business segment, including the intended use
of proceeds therefrom. Our actual results may differ materially
from those contemplated by the forward-looking statements. We
caution you, therefore, against relying on any of these
forward-looking statements. They are neither statements of
historical fact nor guarantees or assurances of future performance.
Important factors that could cause actual results to differ
materially from those in the forward-looking statements include,
but are not limited to, our ability to close on the sale of the
Performance Materials business segment on our anticipated timeline,
or at all, our ability to identify a strategic alternative for the
Performance Chemicals business segment, regional, national or
global political, economic, business, competitive, market and
regulatory conditions, including the ongoing COVID-19 pandemic,
tariffs and trade disputes, currency exchange rates and other
factors, including those described in the sections titled “Risk
Factors” and “Management Discussion & Analysis of Financial
Condition and Results of Operations” in our filings with the SEC,
which are available on the SEC’s website at www.sec.gov. These
forward-looking statements speak only as of the date of this
release. Factors or events that could cause actual results to
differ may emerge from time to time, and it is not possible for us
to predict all of them. We undertake no obligation to update any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by
applicable law.
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version on businesswire.com: https://www.businesswire.com/news/home/20201015006039/en/
Investor Contact: Nahla A. Azmy (610) 651-4561
Nahla.Azmy@pqcorp.com
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