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
- Cash and stock transaction valued at approximately
$2.0 billion, including assumption of
Nexeo's debt and other obligations, or $11.65 per share.
- Highly synergistic combination expected to deliver
$100 million, or $0.43 per share after-tax, of annual run-rate
cost savings by the third year following close, and immediately
reduce annual capital expenditures by $15
million per year.
- Transaction expected to be accretive to Univar Adjusted EPS
beginning in the first full year following closing.
- Pro forma leverage is expected to be below 3.0x by the end of
first full year after closing.
- Univar has hired an external advisor to evaluate strategic
alternatives for Nexeo's industry leading Plastics business, which
may include a potential divestiture of the business.
DOWNERS GROVE, Ill. and
THE WOODLANDS, Texas, Sept. 17, 2018 /CNW/ -- 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 to Acquire Nexeo, Accelerating Transformation and Growth Univar to Acquire Nexeo, Accelerating Transformation and Growth](https://mma.prnewswire.com/media/745428/Univar_Nexeo_Logo.jpg)
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 Details
The 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 Details
The 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.
Financing
Univar 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
Business
Consistent 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.
Advisors
For 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 Call
Univar 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 Univar
Founded 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 Nexeo
Nexeo 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 Statements
This 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.
Disclaimer
This 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 It
In
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 Solicitation
Univar, 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.
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SOURCE Univar Inc.; Nexeo Solutions, Inc.