Combined Company expected to drive growth and
shareholder value with North America’s largest sales force,
broadest product offering, and most efficient supply chain network
in the industry
Univar Inc. (NYSE: UNVR) (“Univar”), a global chemical and
ingredient distributor and provider of value-added services, and
Nexeo Solutions, Inc. (NASDAQ: NXEO) (“Nexeo”), a leading global
chemicals and plastics distributor, today announced they have
entered into a definitive agreement for Univar to acquire Nexeo in
a cash and stock transaction valued at approximately $2.0 billion,
including the assumption of Nexeo’s debt and other obligations, or
$11.65 per Nexeo share, subject to adjustment as described
below.
Univar’s president and CEO, David Jukes, said:
“This transformational combination is designed to create the
premier global chemical and ingredients distributor, with exciting
opportunities for our customers, suppliers, employees and
investors. Together, we will drive growth and shareholder value
with the largest North American sales force in chemical and
ingredients distribution, the broadest product offering, and most
efficient supply chain network in the industry. We expect the
transaction to be accretive to earnings and cash flow beginning in
the first full year post closing and to generate $100 million of
annual run rate cost savings by the third year following close and
reduce annual capital expenditures by $15 million immediately.”
“By combining the best capabilities, talent, and
resources from our two companies we will be even better equipped to
deliver superior service and expanded value to our customers and
supplier partners. We expect to leverage Univar’s leading
e-commerce and digital capabilities across Nexeo’s financial
systems and centralized ERP platform to accelerate the digital
transformation already underway at Univar and reduce costs, while
enhancing the ease of doing business. Our shared commitment to
safety and innovation and our common organization structures
provide a strong foundation for a smooth and successful
integration,” Mr. Jukes concluded.
Nexeo’s CEO, David Bradley, added: “We share
Univar’s confidence in the future of our combined enterprise, given
the strong strategic alignment across our business models,
go-to-market strategies, superior product offerings, and digital
capabilities. This combination represents a logical and compelling
step forward, consistent with our focus on accelerating growth for
the benefit of our customers, employees and suppliers. We are
especially pleased that Nexeo’s employees are highly valued by
Univar, and that our shareholders will be able to participate in
the company’s future success through ongoing equity ownership.”
Transaction DetailsThe merger
agreement provides for each share of Nexeo stock issued and
outstanding to be converted into 0.305 shares of Univar common
stock and $3.29 in cash, subject to adjustment at closing,
representing a purchase price of $11.65 per share of Nexeo common
stock, based on Univar’s closing price on September 14, 2018 of
$27.40. The cash consideration is subject to a potential reduction
of up to $0.41 per share, based on Univar’s stock trading price
prior to the completion of the acquisition.
Following the close, existing Nexeo equity
warrants will be exercisable for the merger consideration in
accordance with the terms of the warrant agreement.
The transaction is expected to deliver $100
million, or approximately $0.43 per share (after tax), in annual
run-rate cost savings by the third year following close, and
immediately reduce ongoing annual capital expenditures by $15
million. It is expected to be accretive to Univar’s Adjusted EPS
beginning in the first full year following closing. Univar expects
pro forma leverage ratio to be below 3.0x by the end of the first
full year after closing.
Closing DetailsThe transaction
has been unanimously approved by the Boards of Directors of both
companies, and is anticipated to close in the first half of 2019,
subject to the approval of both Univar and Nexeo shareholders, as
well as receipt of regulatory approvals and satisfaction of other
customary conditions. Nexeo’s key stockholders, TPG and First
Pacific, have agreed to provide consent for the proposed
transaction.
FinancingUnivar intends to
finance the cash portion of the transaction and refinance Nexeo’s
existing debt with a combination of available cash and bank
financing, for which it has received commitments.
Strategic Review of the Nexeo Plastics
BusinessConsistent with its focus on chemicals and
ingredients distribution, Univar has hired an external advisor to
evaluate strategic alternatives for Nexeo’s industry leading
Plastics business, which may include a potential divestiture.
Nexeo’s Plastics business is a distributor of prime thermoplastic
resins and other products supporting OEMs, molders and design firms
around the world, and will represent less than 10 percent of the
combined companies’ earnings. The business will continue to be led
by Shawn Williams, executive vice president Nexeo Plastics. The
review is expected to be completed concurrent with the close of the
transaction.
AdvisorsFor Univar, Goldman
Sachs & Co. LLC is serving as financial advisor and Wachtell,
Lipton, Rosen & Katz is serving as legal counsel. For Nexeo,
Moelis & Company LLC is serving as financial advisor and Weil,
Gotshal & Manges LLP is serving as legal counsel.
Conference CallUnivar and Nexeo
will host a joint conference call with the investment community on
Monday, September 17, 2018 at 5:00 p.m. ET to discuss the
transaction. Access to the live audio webcast can be accessed on
the Investor Relations section of Univar’s website at
http://investor.univar.com and on Nexeo’s website at
https://ir.nexeosolutions.com. Investors may listen to the
conference call by dialing +1-877-683-2092 (toll free) /
+1-647-689-4067 (international) and using conference code
2593359. Following the event, an archived version of the
webcast and supporting materials will be available on the same
website.
About UnivarFounded in 1924,
Univar (NYSE: UNVR) is a global chemical and ingredient distributor
and provider of value-added services, working with leading
suppliers worldwide. Supported by a comprehensive team of
sales and technical professionals with deep specialty and market
expertise, Univar operates hundreds of distribution facilities
throughout North America, Western Europe, Asia-Pacific and Latin
America. Univar delivers tailored customer solutions through
a broad product and services portfolio sustained by one of the most
extensive industry distribution networks in the world. For
more information, visit www.univar.com.
About NexeoNexeo is a leading
global chemicals and plastics distributor, representing products
from world-class producers to a diverse customer base. From
product specification to sustainable solutions, the Company goes
beyond traditional logistics to provide value-added services across
many industries, including chemicals manufacturing, oil and gas,
coatings, personal care, healthcare, automotive and 3D
printing. The Company leverages a centralized technology
platform to identify efficiencies and create solutions to unlock
value for suppliers and customers. Learn more at
www.NEXEO.com.
Forward-Looking StatementsThis
communication contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
codified in Section 27A of the Securities Act, and Section 21E of
the Exchange Act, as amended. Some forward-looking statements may
be identified, without limitation, by the use of forward-looking
terminology such as “anticipate,” “assume,” “believe,” “estimate,”
“expect,” “intend,” “plan,” “project,” “may,” “will,” “could,”
“would” and similar expressions. These forward-looking statements
include all matters that are not historical facts. They appear in a
number of places throughout this communication and include
statements regarding, among other things, the expected timetable
for closing of the proposed transaction between Univar Inc.
(“Univar”) and Nexeo Solutions, Inc. (“Nexeo”), the expected
benefits and synergies of the proposed transaction and the
operating results, performance and capital structure of the
combined company.
Forward-looking statements are based on Univar’s
and Nexeo’s current expectations and beliefs concerning future
developments and their potential effect on Univar, Nexeo and the
combined company. While Univar and Nexeo believe that
forward-looking statements are reasonable as and when made, there
can be no assurance that future developments affecting Univar,
Nexeo and the combined company will be those anticipated. A number
of important factors, risks and uncertainties could cause actual
results to differ materially from those contained in or implied by
the forward-looking statements, many of which are beyond Univar’s
or Nexeo’s control. Factors, risks and uncertainties that could
cause actual results to differ from those reflected in
forward-looking statements include: changes in general economic,
business and political conditions, including changes in the
financial markets; the ability to satisfy the conditions to closing
of the proposed transaction on the expected timing or at all and
other risks related to the completion of the proposed transaction;
the ability to obtain required shareholder and regulatory approvals
for the proposed transaction on the expected timing or at all; the
ability to complete the proposed transaction on the expected terms
and timing or at all; higher than expected or unexpected costs
associated with or relating to the proposed transaction; the risk
that expected benefits, synergies and growth prospects of the
proposed transaction and combined company may not be achieved in a
timely manner or at all; results of the strategic review of Nexeo’s
plastics distribution business in connection with the consummation
of the proposed transaction and the outcome and impact of a
resulting strategic transaction, if any; the ability to
successfully integrate Nexeo’s business with Univar following the
closing; the risk that Univar and Nexeo will be unable to retain
and hire key personnel; the risk that disruption from the proposed
transaction may adversely affect Univar’s and Nexeo’s business and
their respective relationships with customers, suppliers,
distributors or employees; and other risks detailed in the risk
factors discussed in “Item 1.A. Risk Factors” in each of Univar’s
and Nexeo’s most recent Annual Reports on Form 10-K, as updated by
any Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and
future filings with the SEC. Unless otherwise indicated or the
context otherwise requires, comments concerning our expectations
for future revenues and operating results are based on our
forecasts for our existing operations and do not include the
potential impact of any future acquisitions, divestitures or other
potential strategic transactions. Readers are cautioned not to
place undue reliance on forward-looking statements, which speak
only as of the date hereof. Neither Univar nor Nexeo undertake any
obligation to update or revise any forward-looking statements after
the date they are made, whether as a result of new information,
future events or otherwise.
DisclaimerThis communication
shall neither constitute an offer to sell or the solicitation of an
offer to buy any securities, nor shall there be any sale of
securities in any jurisdiction in which the offer, solicitation, or
sale would be unlawful prior to the registration or qualification
under the securities laws of any such jurisdiction. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended.
Additional Information and Where to Find
ItIn connection with the proposed transaction between
Univar and Nexeo, Univar intends to file a registration statement
on Form S-4, which will contain a prospectus and a proxy statement
for Univar and consent solicitation statement for Nexeo (the
“prospectus/joint proxy and consent solicitation statement”).
INVESTORS AND SECURITY HOLDERS OF UNIVAR AND NEXEO ARE URGED TO
READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME
AVAILABLE, INCLUDING THE PROSPECTUS/JOINT PROXY AND CONSENT
SOLICITATION STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION. A definitive
prospectus/joint proxy and consent solicitation statement will be
sent to the shareholders of Univar and Nexeo. Investors and
security holders will be able to obtain copies of the
prospectus/joint proxy and consent solicitation statement as well
as other filings containing information about Univar and Nexeo,
without charge, at the SEC’s website, http://www.sec.gov. Copies of
the documents filed with the SEC by Univar will be available free
of charge within the investor relations section of Univar’s website
at www.univar.com. Copies of the documents filed with the SEC by
Nexeo will be available free of charge within the investor
relations section of Nexeo’s website at www.nexeosolutions.com.
Participants in the
SolicitationUnivar, Nexeo and each of their directors,
executive officers and certain other employees may be deemed to be
participants in the solicitation of proxies from Univar’s
shareholders and consents from Nexeo’s shareholders in respect of
the proposed transaction between Univar and Nexeo. Information
regarding Univar’s directors and executive officers is contained in
Univar’s proxy statement for its 2018 annual meeting, which was
filed with the SEC on March 20, 2018. Information regarding Nexeo’s
directors and executive officers is contained in Nexeo’s proxy
statement for its 2018 annual meeting, which was filed with the SEC
on December 14, 2017. Investors and security holders may obtain
additional information regarding the interests of such participants
by reading the prospectus/joint proxy and consent solicitation
statement when it becomes available, which may be obtained as
described in the paragraphs above.
|
FOR
ADDITIONAL INFORMATION: |
|
|
|
Univar Investor
Relations |
|
Nexeo Investor
Relations |
David Lim |
|
Michael
Everett |
+1
844-632-1060 |
|
+1 281-297-0856 |
IR@univar.com |
|
Investor.Relations@nexeosolutions.com |
|
|
|
Univar Media
Relations |
|
Nexeo Media
Relations |
Dwayne Roark |
|
Tracy Diel |
+1
331-777-6031 |
|
+1 281-297-0851 |
mediarelations@univar.com |
|
Media.Relations@nexeosolutions.com |
|
|
|
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