LyondellBasell Announces Entry into a Definitive Agreement to Acquire A. Schulman, Inc.
Combination creates a premier global provider of Advanced Polymer Solutions
HOUSTON and LONDON and AKRON, Ohio, Feb. 15, 2018 /PRNewswire/ --
LyondellBasell (NYSE: LYB), one of the largest plastics, chemicals and refining companies in the world, and A. Schulman, Inc. (NASDAQ: SHLM), a leading global supplier of high-performance plastic compounds, composites and powders, today announced that they have entered into a definitive agreement under which LyondellBasell will acquire A. Schulman for a total consideration of $2.25 billion. The acquisition builds upon LyondellBasell's existing platform in this space to create a premier Advanced Polymer Solutions business with broad geographic reach, leading technologies and a diverse product portfolio. "The acquisition of A. Schulman is a natural extension of our current platform. This combination will allow us to provide our customers with a wider range of innovative solutions while adding the ability to serve high-growth end markets beyond the automotive sector, such as packaging and consumer products, electronics and appliances, building and construction, and agriculture," said Bob Patel, Chief Executive Officer of LyondellBasell. "By leveraging our proven approach to operational, commercial and business excellence, the combined business will create significant value for our shareholders and customers." "This transaction, which provides our shareholders with a compelling, immediate cash premium, represents the culmination of a robust assessment of strategic alternatives undertaken by our Board of Directors," said Joseph M. Gingo, Chairman, President and Chief Executive Officer of A. Schulman, Inc. "We are delighted to join forces with LyondellBasell, an industry leader we have admired for many years. LyondellBasell not only shares our commitment to meeting customers' demanding requirements, but with its scale and resources, the combined business will be better positioned to address a broader range of customer needs by integrating across applications and offering customers a wider range of solutions in attractive and growing markets. We also expect this combination to create significant opportunities for A. Schulman employees, whose professionalism and expertise will be integral to advancing LyondellBasell's vision, values and commitment to making a positive global impact." Transaction Terms LyondellBasell is using cash-on-hand to finance the acquisition. LyondellBasell expects to achieve $150 million in run-rate cost synergies within two years, primarily by leveraging its well-established approach to cost discipline and productivity, as well as its culture of operational, business and commercial excellence. Further, the acquisition is expected to be accretive to earnings within the first full year following close. The combined businesses had revenues of $4.6 billion and adjusted EBITDA of $446 million over the last 12 months. The proposed acquisition, which has been unanimously approved by the respective boards of LyondellBasell and A. Schulman, is subject to customary closing conditions, including regulatory approvals and approval by A. Schulman shareholders. The acquisition is expected to close in the second half of 2018. More information on the transaction can be found at www.LyondellBasell.com/AdvancedPolymerSolutions Shearman & Sterling LLP is serving as LyondellBasell's legal counsel, while J.P. Morgan and Dyal Co. are serving as co-financial advisors. Skadden, Arps, Slate, Meagher & Flom LLP is serving as A. Schulman's legal counsel, while Citigroup Global Markets, Inc. is serving as financial advisor. Conference Call LyondellBasell will host a conference call on Thursday, February 15, 2018, at 8:45 a.m. EST. Participants on the call will include Chief Executive Officer Bob Patel, Chief Financial Officer Thomas Aebischer and Director of Investor Relations David Kinney. The toll-free dial-in number in the U.S. is 800-475-8402. A complete listing of toll-free numbers by country is available at www.LyondellBasell.com/teleconference for international callers. The passcode for all numbers is 6934553. The slides that accompany the call will be available at https://www.LyondellBasell.com/investorevents A replay of the call will be available from 2:00 p.m. EST February 15, 2018, until March 18, 2018, at 12:59 a.m. EST. The replay dial-in numbers are 800-879-5513 (U.S.) and 402-220-4734 (toll). The passcode for each is 4587. About LyondellBasell About A. Schulman Information Related to Financial Measures Cautionary Note Regarding Forward-looking Statements Additionally, this communication includes forward-looking statements relating to the proposed merger between LyondellBasell and A. Schulman, Inc. ("Schulman"), including financial estimates and statements as to the expected timing, completion and effects of the proposed merger. These estimates and statements are subject to risks and uncertainties, and actual results might differ materially. Such estimates and statements include, but are not limited to, statements about the benefits of the merger, including future financial and operating results, the combined company's plans, expectations and intentions, and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of the management of LyondellBasell and Schulman and are subject to significant risks and uncertainties outside of our control. Actual results could differ materially based on factors including, but not limited to, the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, the risk that Schulman shareholders may not adopt the Merger Agreement, the risk that the necessary regulatory approvals may not be obtained or may be obtained subject to conditions that are not anticipated, failure to realize the benefits expected from the proposed merger and the effect of the announcement of the proposed merger on the ability of LyondellBasell and Schulman to retain customers and retain and hire key personnel and maintain relationships with their suppliers, and on their operating results and businesses generally. Discussions of additional risks and uncertainties are contained in LyondellBasell's and Schulman's filings with the Securities and Exchange Commission. Neither LyondellBasell nor Schulman is under any obligation, and each expressly disclaim any obligation, to update, alter, or otherwise revise any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events, or otherwise. Persons reading this communication are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. Additional Information and Where to Find It Participants in the Solicitation 1 Represents LyondellBasell's Polypropylene Compounding (PPC) business revenues of $2.1 billion for the twelve-month period ended December 31, 2017, plus A. Schulman revenues of $2.5 billion for the twelve-month period ended November 30, 2017. A. Shulman revenue information obtained from publicly available quarterly release data. 2 Represents LyondellBasell's Polypropylene Compounding (PPC) business adjusted EBITDA of $241 million for the twelve-month period ended December 31, 2017, plus A. Schulman adjusted EBITDA of $205 million for the twelve-month period ended November 30, 2017. A. Shulman adjusted EBITDA information obtained from publicly available quarterly release data.
SOURCE LyondellBasell For further information: LyondellBasell: Michael Waldron, Vice President, Global Corporate Communication, LyondellBasell, 1221 McKinney Street, Suite 300, Houston, Texas 77010 USA, Office: +1-713-309-3312, Michael.Waldron@lyondellbasell.com; www.lyondellbasell.com; A. Schulman: Jennifer K. Beeman, Vice President, Corporate Communications & Investor Relations, A. Schulman, Inc., 3637 Ridgewood Road, Fairlawn, Ohio 44333, Tel: +1-330-668-7346, Email: Jennifer.Beeman@aschulman.com; www.aschulman.com; James Golden / Jed Repko; Joele Frank, Wilkinson Brimmer Katcher, +1- 212-355-4449
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