LyondellBasell Announces Entry into a Definitive Agreement to Acquire A. Schulman, Inc.
HOUSTON and LONDON and AKRON, Ohio, Feb. 15, 2018
- Creates an industry-leading compounding business with combined revenue of $4.6 billion and adjusted EBITDA of $446 million over the last 12 months
- Expects to capture $150 million in run-rate cost synergies within two years, while being accretive to earnings within the first full year following the close, creating significant value for shareholders
- Doubles the size of LyondellBasell's existing compounding business and establishes a platform for future growth with reach into additional high-growth markets
- Complementary strengths and capabilities will provide customers with a full range of innovative products and end-to-end solutions
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
Under the terms of the agreement, LyondellBasell will acquire A. Schulman for a total consideration of $2.25 billion. LyondellBasell will purchase 100 percent of A. Schulman common stock for $42 per share in cash and one contingent value right per share and assume outstanding debt and certain other obligations. In addition, the contingent value rights generally will provide a holder with an opportunity to receive certain net proceeds, if any are recovered, from certain ongoing litigation and government investigations relating to A. Schulman's Citadel and Lucent acquisitions.
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
LyondellBasell (NYSE: LYB) is one of the largest plastics, chemicals and refining companies in the world. Driven by its 13,000 employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, and improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin technologies. In 2018, LyondellBasell was named to Fortune magazine's list of the "World's Most Admired Companies." More information about LyondellBasell can be found at www.LyondellBasell.com.
About A. Schulman
A. Schulman, Inc. is a leading international supplier of high-performance plastic compounds, composites and resins headquartered in Akron, Ohio. Since 1928, the company has been providing innovative solutions to meet its customers' demanding requirements. The company's customers span a wide range of markets, such as packaging, mobility, building & construction, electronics & electrical, agriculture, personal care & hygiene, sports, leisure & home, custom services and others. The company employs approximately 5,100 people and has 54 manufacturing facilities globally. Additional information about A. Schulman can be found at www.aschulman.com.
