TIDMPAH
RNS Number : 5208B
Platform Specialty Products Corp.
07 October 2015
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION
Platform Specialty Products Corporation
Provides Acquisition and Financing Updates and Revised 2015 Full
Year Guidance;
Announces Key Promotion and Date for Release of Third Quarter
2015 Financial Results
-- Recommended acquisition of Alent plc and the first of the OM
Group Electronic Chemicals and Photomasks acquisitions expected to
close in Q4 2015.
-- Platform has $1.875 billion in existing committed and
underwritten long-duration debt to finance the purchase of Alent
plc.
-- Full year 2015 adjusted EBITDA guidance revised to $550
million to $570 million from $620 million to $650 million primarily
related to continued foreign exchange volatility and significant
changes in distribution strategy related to channel stocking in its
Agricultural Solutions business segment. This guidance does not
include any contribution from pending acquisitions.
-- Benjamin H. Gliklich appointed Chief Operating Officer.
West Palm Beach, Florida - October 7, 2015 - Platform Specialty
Products Corporation (NYSE:PAH)("Platform") today provided an
update on the timing of the expected closings of its previously
announced acquisitions of Alent plc ("Alent") and the Electronic
Chemicals and Photomasks businesses of OM Group, Inc. (the "OM EC
and PM Businesses") and provided further details regarding the
financing of these acquisitions. In addition, Platform revised its
2015 guidance issued on August 13, 2015 to reflect further foreign
exchange volatility, continued weakness in certain agricultural end
markets, and a decision to limit "pre-season" selling activity in
its Agricultural Solutions business segment. Additionally, Platform
announced that Benjamin H. Gliklich has been promoted from Vice
President, Corporate Development, Finance and Investor Relations to
become Platform's Chief Operating Officer. Finally, Platform
announced that it intends to release its third quarter 2015
financial results before markets open on Wednesday, November 11,
2015.
Acquisition and Financing Update
As previously announced, the closing of Platform's proposed
acquisitions of the OM EC and PM Businesses will take place in two
stages with the first stage expected within thirty days and the
second in early 2016. Platform's acquisitions of the OM EC and PM
Businesses have received all required regulatory approvals. The
Alent acquisition is also proceeding as expected, with approval
from only one regulatory authority outstanding as of the date of
this press release.
Platform has sufficient cash, principally from its $483 million
June 2015 equity issuance, to fund the acquisitions of the OM EC
and PM Businesses. Consideration for Platform's acquisition of
Alent is a mix of stock and cash. The stock portion is a fixed
number of shares. As disclosed in the joint announcement, dated
July 13, 2015 (the "2.7 Announcement"), issued by Platform and
Alent, Platform will issue 18,419,738 shares of its common stock to
shareholders of Alent as consideration for the acquisition. This
partial share alternative is based on a fixed exchange ratio of
0.31523 based on the VWAP of $24.76 on July 10, 2015. At the time
of the announcement, the share alternative was valued at
approximately $455 million. For the $1.8 billion cash portion of
the purchase price, and as announced in the 2.7 Announcement,
Platform has an underwritten commitment for long-term debt
financing at what it believes to be competitive market rates. The
commitment is for a term loan which is to be pari passu with its
existing secured debt. As a result, Platform does not need to issue
additional equity to finance the closing of the Alent
acquisition.
Chief Financial Officer Sanjiv Khattri said, "Despite volatility
in the capital markets, Platform has long-term financing and cash
on hand to complete the OM Group and Alent transactions. Utilizing
the committed financing to pay for the balance of the Alent
consideration would result in a leverage ratio of 5.6x - 5.8x net
debt to adjusted pro forma EBITDA, based on Platform's revised 2015
adjusted EBITDA guidance, LTM adjusted EBITDA for the OM EC and PM
Businesses and Alent, and previously announced synergies ([1])
.
While this will bring Platform's leverage ratio above our target
range of 4.5x net debt to EBITDA, we intend to return to that
target range through EBITDA growth and free cash flow generation.
We remain committed to the acquisitions of Alent and the OM Group
businesses and confident in their strategic rationale and
industrial logic."
Chairman Martin E. Franklin commented, "The opportunity for
Platform to drive earnings growth in 2016 and beyond through
execution, end-market growth, and the realization of synergies is
the key focus for our management team. We can only achieve our
longer term value creation objectives by making the businesses we
acquire better. Acquisitions will be a secondary priority while we
execute on these important integrations."
Revised 2015 Guidance
Platform is providing a revision to its 2015 adjusted EBITDA
guidance, which is now expected to be within the range of $550
million to $570 million, excluding any impact from the OM EC and PM
Businesses and Alent. This updated outlook reflects the latest
foreign exchange rates, lower specialty chemical consumption in
some agricultural market segments, and the impact of a change in
Platform's approach to its distribution strategy in its
Agricultural Solutions business segment. The impact of foreign
exchange is approximately $25 million. The impact from a weaker
agricultural specialty chemical market is approximately $10
million, and the expected impact from the change in its
distribution strategy in its Agricultural Solutions business
segment is approximately $40 million. The foreign exchange impact
is nearly exclusively translational, in light of actions taken to
mitigate transactional exposure for its Ag business.
Changes to Agricultural Business Segment Distribution
Strategy
Platform has decided to change its distribution strategy and
limit "pre-season" lower margin selling of its products in order to
improve the overall margin of these products, as "pre-season" sales
often come at a discount. Platform believes that this approach will
significantly improve its long term business quality. Realigning
inventory levels at distributors to more closely match underlying
demand will best position the company for sustainable growth in the
future. Platform believes that much of the revenue that will be
foregone in 2015 will be realized starting in 2016 and at enhanced
margins.
Chief Executive Officer Daniel H. Leever commented, "The macro
environment made this year challenging for many global companies
and agricultural companies in particular. Even though the general
niche nature of our agricultural business insulates us from the
broader trends in row crops, 2015 has been a difficult year for our
agricultural business due to the impact of persistent foreign
exchange headwinds, high product inventories due to low specialty
chemicals consumption (drought and low levels of infestation) and
our decision to change our business practices with regard to
"pre-season" sales. The improvements we are making to the business
leave us optimistic about the year to come. Our belief in a strong
future for our Agricultural Solutions business in 2016 and beyond
has not been diminished by the difficult environment this year. Our
Performance Applications business continues to perform in line with
expectations."
Chairman Martin E. Franklin concluded, "The Platform team has
built a portfolio of high-quality, high-cash flow businesses in its
two years of existence. These businesses, while resilient, are not
immune to global macro- or sector-specific headwinds, which
impacted performance in 2015. Looking ahead to 2016, we have a
great deal to be excited about. We believe the earnings growth we
can generate through execution and synergy realization remains
compelling."
Appointment of Chief Operating Officer
Platform also announced today that Benjamin H. Gliklich has been
promoted to Chief Operating Officer, effective immediately. Mr.
Gliklich was most recently Vice President, Corporate Development,
Finance and Investor Relations. In this new role, Mr. Gliklich will
work closely with Scot Benson, President of the Performance
Applications business segment, and with the future President of the
Agricultural Solutions business segment on operational activities,
acquisition integration and synergy realization, as well as
continuing to oversee future acquisition activity. Mr. Gliklich
joined Platform in 2014 and has overseen the company's M&A and
capital markets strategies and investor relations program. Ben
joined Platform after spending several years at General Atlantic, a
global growth-oriented private equity firm, and previously, four
years with Goldman Sachs in its investment banking division in New
York and Sydney. Ben graduated from Princeton University cum laude
and from Columbia Business School with distinction.
Benjamin Gliklich said, "Platform's long-term value creation
strategy requires buying great businesses and making them better.
In this new role, I am excited to be in a position to see the full
lifecycle of this activity. The synergy opportunity in front of us
is extremely compelling and collectively our principal focus. I
look forward to providing positive updates in due course."
Release of Third Quarter 2015 Financial Results
(MORE TO FOLLOW) Dow Jones Newswires
October 07, 2015 06:44 ET (10:44 GMT)
Finally, Platform announced that it intends to release its third
quarter 2015 financial results before markets open on Wednesday,
November 11, 2015 and to host a webcast/dial-in conference call to
discuss its third quarter 2015 financial results at 8:00 a.m.
(Eastern Time) on that day. During this call, Platform also intends
to provide an update on synergy realization, integration, and on
business segment performance.
To listen to the call by telephone, please dial (855) 357-3116
(domestic) or (484) 365-2867 (international) and provide the
Conference ID: 55127085. The call will be simultaneously webcast at
www.platformspecialtyproducts.com.
A replay of the call and webcast will be available for three
weeks shortly after completion of the live call at
www.platformspecialtyproducts.com.
About Platform
Platform is a global, diversified producer of high-technology
specialty chemicals and provider of technical services. The
business involves the formulation of a broad range of
solutions-oriented specialty chemicals, which are sold into
multiple industries, including agrochemical, animal health,
electronics, graphic arts, plating, and offshore oil production and
drilling. More information on Platform is available at
www.platformspecialtyproducts.com.
U.K. City Code Directors' Confirmation
The following statement contained in this release:
"Platform is providing a revision to its 2015 adjusted EBITDA
guidance, which is now expected to be within the range of $550
million to $570 million, excluding any impact from the OM EC and PM
Businesses and Alent acquisition. "
constitutes a profit forecast (the "Platform Profit Forecast")
for the purposes of the U.K. City Code, which applies in light of
our proposed Alent acquisition.
Under Rule 28 of the U.K. City Code, our directors are required
to provide a "directors' confirmation" in respect of the Platform
Profit Forecast. The Directors of Platform have considered the
Platform Profit Forecast and hereby confirm that it is valid as at
the date of this release and has been properly compiled on the
basis of the assumptions set out in Schedule 1 and that the basis
of the accounting used in the Platform Profit Forecast is
consistent with Platform's accounting policies.
In accordance with Rule 28 of the U.K. City Code, the basis of
preparation and principal assumptions upon which the Platform
Profit Forecast is based are included in Schedule 1 below.
In accordance with Rule 30.4 of the U.K. City Code, a copy of
this press release will be available on Platform's website at
www.platformspecialtyproducts.com.
IMPORTANT NOTICES
Further Information
This press release and the conference call referenced above are
for information purposes only and are not intended to, and do not,
constitute or form part of any offer or invitation, or the
solicitation of an offer, to purchase, otherwise acquire, subscribe
for, sell or otherwise dispose of, any securities or the
solicitation of any vote or approval in any jurisdiction pursuant
to the Alent acquisition or otherwise. The Alent acquisition will
be implemented solely pursuant to the terms of the related scheme
document, which contains the full terms and conditions of the Alent
Acquisition.
Other Information
Our non-GAAP measures herein include adjusted EBITDA and net
debt to EBITDA. Platform has presented both U.S. GAAP and adjusted
financials to better provide investors with measures that allow
them to more readily compare the performance of Platform
period-over-period. These adjusted amounts aim to provide investors
insight into the cash generated from operations after taking into
consideration reinvestment in the business for adjusted EBITDA. The
adjustments to Platform's reported numbers are detailed in Schedule
2 to this press release.
Forward-Looking Statements
This release contains statements which are, or may be deemed to
be, "forward-looking statements" which are prospective in nature.
All statements other than statements of historical fact are
forward-looking statements. They are based on current expectations
and projections about future events, and are therefore subject to
risks and uncertainties which could cause actual results to differ
materially from the future results expressed or implied by the
forward-looking statements. Often, but not always, forward-looking
statements can be identified by the use of forward-looking words
such as "plans", "expects", "is expected", "is subject to",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates", "believes", "targets", "aims", "projects" or words
or terms of similar substance or the negative thereof, as well as
variations of such words and phrases or statements that certain
actions, events or results "may", "could", "should", "would",
"might" or "will" be taken, occur or be achieved. Such statements
are qualified in their entirety by the inherent risks and
uncertainties surrounding future expectations. Forward-looking
statements include, but are not limited to, statements relating to
the following: (i) our financial or operational results including
our earnings guidance, future capital expenditures, expenses,
revenues, earnings, synergies, economic performance, indebtedness,
leverage, inventory, financial condition, dividend policy, losses
and future prospects; (ii) business and management strategies;
(iii) the closing of the Alent acquisition and the OM EC and PM
Business acquisitions and any financing therefor; and (iv) the
effects of global economic conditions on Platform's business
including foreign exchange rates.
Such forward-looking statements involve known and unknown risks
and uncertainties that could significantly affect expected results
and are based on certain key assumptions. Many factors may cause
the actual results, performance or achievements of Platform to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements
including, among other things: Platform's ability to close the
proposed acquisitions of the OM EC and PM Businesses and Alent
(including the possibility that necessary regulatory approvals
relating to these pending acquisitions will not be obtained or any
of the respective closing conditions of these pending acquisitions
will not be satisfied); Platform's adjusted earnings per share,
expected or estimated revenue; the outlook for Platform's markets
and the demand for its products, estimated sales, segment earnings,
net interest expense, income tax provision, restructuring and other
charges, cash flows from operations, consistent profitable growth,
free cash flow, future revenues and gross operating and adjusted
EBITDA margin improvement requirement and expansion, organic net
sales growth, bank debt covenants; the success of new product
introductions, growth in costs and expenses; Platform's ability to
identify, hire and retain executives and other employees with
sufficient expertise; Platform's assessment of its internal control
over financial reporting; the impact of commodities and currencies
and Platform's ability to manage its risk in these areas; general
business and economic conditions globally, industry trends,
competition, changes in government and other regulations, including
in relation to the environment, health and safety, taxation, labor
relations and work stoppages, changes in political and economic
stability, disruptions in business operations due to reorganization
activities and interest rate and currency fluctuations; and the
impact of acquisitions, divestitures, restructuring and other
unusual items, including Platform's ability to successfully
complete as well as integrate and obtain the anticipated results
and synergies from its consummated, pending and future
acquisitions.
Other risk factors are described in Platform's securities
filings, including in Platform's Quarterly Report on Form 10-Q for
the fiscal quarter ended June 30, 2015, and any subsequent reports
on Forms 10-K, 10 Q and 8-K, which are or will be available at:
http://ir.platformspecialtyproducts.com/financials.cfm.
These projections and statements are based on management's
estimates and assumptions with respect to future events and
financial performance, and are believed to be reasonable, though
Platform and its associates, directors, officers and advisers do
not provide any representation, assurance or guarantee that the
occurrence of the events expressed or implied in any
forward-looking statements in this release will actually occur.
Platform undertakes no obligation to update any forward-looking
statements, whether as a result of new information, future events
or otherwise. You are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
hereof.
This release is intended to qualify for the safe harbor from
liability established by the Private Securities Litigation Reform
Act of 1995 as it contains "forward-looking statements" within the
meaning of the federal securities laws. A copy of this press
release will be available on Platform's website at
www.platformspecialtyproducts.com.
Schedule 1
Platform Profit Forecast
In accordance with Rule 28 of the U.K. City Code, the basis of
preparation and principal assumptions upon which the Platform
Profit Forecast is based are included below.
1. Basis of preparation
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