- Positioned to Better Serve Customers with Leading Technologies,
Innovation, and Global Scale
- Expect at Least $65 Million in Annual Run-Rate Cost Synergies
Achieved in 24-36 Months
- Complementary High-Growth Product Portfolios to Accelerate
Revenue Opportunities
- Combined Company to Have Strong Financial Profile with
Additional Flexibility
- Companies to Host Conference Call Today at 8:30 a.m. ET
Schweitzer-Mauduit International, Inc. (NYSE: SWM) (“SWM”) and
Neenah, Inc. (NYSE: NP) (“Neenah”), two leading global
manufacturers of specialty materials, today announced that they
have entered into a definitive agreement to combine in an all-stock
merger of equals with combined revenues of approximately $3
billion, expanded scale and capabilities, and accelerated growth
opportunities.
This transaction brings together two organizations with highly
complementary technologies, geographies and product portfolios in
specialty materials. The combined company will capitalize on
powerful megatrends with strong positions in large, growing
categories including Filtration, Healthcare & Wellness,
Protective & Adhesive Solutions, Industrial Solutions, and
Packaging & Specialty Paper.
Under the terms of the agreement, which was unanimously approved
by the Boards of Directors of both companies, shareholders of
Neenah will receive 1.358 shares of SWM common stock for each share
of Neenah common stock owned. Following the closing of the
transaction, SWM shareholders will own approximately 58 percent of
the combined company, and Neenah shareholders will own
approximately 42 percent of the combined company, in each case, on
a fully diluted basis.
“I’m proud of the work our team has done to successfully expand
and grow our global portfolio over the last several years, adding
core capabilities and scale to better serve our customers. This
merger is an exciting next step on our journey and one that will
deliver significant shareholder value,” said Dr. Jeff Kramer, Chief
Executive Officer of SWM. “SWM has earned a reputation as a
critical solutions provider. The combination with Neenah is a
continuation of our strategic intent to solve our customers’ most
complex design challenges. We are excited by the numerous benefits
of this merger, including the significantly broadened customer
base, product lines and technical expertise. At the same time,
combining the talented teams, cultures and well-run operations of
Neenah and SWM will enhance our position as a world-class leader
across our end-markets, poised to drive long-term growth and
attractive returns. We look forward to working with the Neenah team
to unlock the tremendous value of this compelling combination for
all stakeholders.”
“This combination is a unique opportunity to accelerate our
growth strategy and continue the transformation of our business,
creating a global leader in specialty materials with strong and
defensible positions in attractive end-markets,” said Julie
Schertell, President and Chief Executive Officer of Neenah.
“Merging our two companies enhances our ability to grow and solve
the needs of our customers for demanding, innovative products that
address global challenges such as the necessity for clean water and
air, sustainable alternatives, and enhanced health and wellness.
The synergy potential for this transaction is significant, and the
all-stock structure enables shareholders of both companies to
participate in the substantial value creation and future growth
opportunities of the combined company. SWM has a talented team that
shares our values, with a focus on employee safety, innovation and
customer intimacy. We look forward to delivering on the potential
of this transaction by capitalizing on our combined capabilities
and strengths.”
Strategic and Financial Benefits of the Combination
- Creates a Global Leader in Specialty Materials with a Broad
Portfolio of Solutions: Combining the Neenah and SWM product
portfolios will enhance exposure to growing, global end-markets
with clear megatrends of clean air and water, health and wellness,
sustainability, and advanced protective solutions. Complementary
capabilities exist in key categories including filtration,
healthcare, tape, packaging, release liners, and adhesive
solutions.
- Highly Achievable Cost Synergies: The transaction is
expected to achieve at least $65 million in annual run-rate cost
synergies within 24-36 months post close. Key cost savings include
organizational optimization, procurement and other supply chain
efficiencies, and redundant public company costs.
- Accelerates Growth with Enhanced Scale and
Larger Global Footprint: The combination is expected to
accelerate long-term revenue growth, with numerous opportunities to
cross-sell the extensive suite of specialty materials, leverage
each company’s deep customer relationships, combined technology
portfolio, and innovation capabilities. In addition, with
operations spanning four continents, the combination will create a
stronger presence to better serve customers both globally and
regionally, with significant opportunities to increase penetration
in several geographies.
- Strong Financial Profile and Commitment to Shareholder Value
Creation: The combined company is projected to have
approximately $450 million of pro-forma adjusted EBITDA (including
synergies) and margins of more than 15 percent in highly
specialized, defensible categories. The transaction is also
expected to increase the combined company’s ability to generate
cash, providing financial stability and flexibility. The combined
company intends to uphold Neenah and SWM’s track records of
prioritized uses of cash, including returning capital to
shareholders. As a larger, well-capitalized company, the combined
entity also expects to benefit from greater access to capital
markets, opportunities for lower cost of capital, and long-term
strategic optionality.
- Accelerates Innovation: The combined company’s suite of
technologies, intellectual property, and R&D capabilities in
material science is expected to accelerate the pace of innovation,
with the potential to deliver breakthrough, high-growth products
that better meet the ongoing needs of customers and drive long-term
profitability for shareholders.
- Shared Values and Culture: SWM and Neenah have highly
aligned outlooks on business, prioritizing employee safety and
development, and partnering with customers to create premium,
unique solutions that fuel their success. With shared commitments
to environmental stewardship, sustainability, engagement,
inclusion, and corporate governance, the combined business will
build upon both companies’ ongoing ESG efforts.
Headquarters, Leadership and Governance
The combined company will remain headquartered in Alpharetta,
Georgia and will be led by a proven management team that reflects
the strengths and capabilities of both organizations. Upon close,
Julie Schertell, President and Chief Executive Officer of Neenah,
will serve as President and Chief Executive Officer of the combined
company. Dr. Jeff Kramer, Chief Executive Officer of SWM, will
serve as a strategic advisor for the combined company following the
close of the transaction. A new name for the combined company will
be selected in connection with the merger.
The new Board will consist of nine directors, five of whom will
be from the SWM Board and four of whom will be from the Neenah
Board, including Ms. Julie Schertell. John D. Rogers, Non-Executive
Chairman of the SWM Board, will serve as Non-Executive Chair of the
combined company’s Board of Directors.
Approvals and Closing
The transaction has been unanimously approved by the Boards of
Directors of both SWM and Neenah. The merger is expected to close
in the second half of 2022, subject to Neenah and SWM shareholder
approval, regulatory approvals and other customary closing
conditions.
Advisors
J.P. Morgan Securities LLC is serving as financial advisor and
King & Spalding LLP is serving as legal advisor to SWM. Perella
Weinberg Partners LP is serving as financial advisor and Bryan Cave
Leighton Paisner LLP is serving as legal advisor to Neenah.
Cravath, Swaine & Moore LLP is serving as legal advisor to the
independent members of the Neenah Board of Directors.
Joint Investor Call
SWM and Neenah management will hold a joint conference call and
webcast today at 8:30 a.m. ET to discuss the transaction. The live
event can be accessed directly using this link or by visiting the
Investor Relations sections of the Neenah or SWM websites. In
addition, an investor presentation and infographic are available on
both websites. Today’s conference call may also be accessed by
dialing 877-524-8416 or +1-412-902-1028. A replay of the webcast
will be available through April 25, 2022 on both companies’
websites, or by dialing 877-660-6853 or 201-612-7415 and providing
the access code 13728309.
About SWM
Schweitzer-Mauduit International, Inc., operating as SWM
International, is a leading global performance materials company,
focused on finding ways to improve everyday life by bringing
best-in-class innovation, design, and manufacturing solutions to
our customers. Our highly engineered films, adhesive tapes, foams,
nets, nonwovens, and papers are designed and manufactured using
resins, polymers, and natural fibers for a variety of industries
and specialty applications. SWM and its subsidiaries manufacture on
four continents, conduct business in over 90 countries and employ
approximately 5,000 people worldwide. For further information,
please visit SWM’s website at www.swmintl.com.
About Neenah, Inc.
Neenah is a leading global manufacturer of specialty materials
serving customers across six continents, with headquarters in
Alpharetta, Georgia. We are focused on growing in filtration media,
specialty coatings, engineered materials and imaging &
packaging. Our materials are in various products used every day,
such as transportation and water filters, premium packaging of
spirits, technology and beauty products, industrial labels, tapes
and abrasives, and digital printing for high-end apparel. To learn
more, please visit www.neenah.com.
Forward-Looking Statements
Certain of the matters discussed in this communication which are
not statements of historical fact constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements, which are
based on current expectations, estimates and projections about the
industry and markets in which SWM and Neenah operate and beliefs of
and assumptions made by SWM management and Neenah management,
involve uncertainties that could significantly affect the financial
condition, results of operations, business plans and the future
performance of SWM, Neenah or the combined company. Words such as
“believes,” “anticipates,” “expects,” “assumes,” “outlook,”
“intends,” “targeted,” “estimates,” “forecasts,” “projects,”
“plans,” “may,” “could,” “should,” “would,” and similar expressions
are intended to identify forward-looking statements but are not the
exclusive means of identifying these statements. Such
forward-looking statements include, but are not limited to,
statements about the strategic rationale and financial benefits of
the transaction, including expected future financial and operating
results and the combined company’s plans, objectives, expectations
and intentions. All statements that address operating performance,
events or developments that we expect or anticipate will occur in
the future — including statements relating to projections of
revenue, income or loss, earnings or loss per share, the payment or
nonpayment of dividends, capital structure and other financial
items; statements of plans and objectives of SWM or Neenah or their
respective management or Board of Directors, including those
relating to products or services; and statements of future economic
performance — are forward-looking statements. These statements are
not guarantees of future performance and involve certain risks,
uncertainties and assumptions that are difficult to predict.
Although we believe the expectations reflected in any
forward-looking statements are based on reasonable assumptions, we
can give no assurance that our expectations will be attained, and
therefore actual outcomes and results may differ materially from
what is expressed or forecasted in such forward-looking statements.
In addition to factors previously disclosed in SWM’s and Neenah’s
reports filed with the SEC and those identified elsewhere in this
communication, the following factors, among others, could cause
actual results to differ materially from forward-looking statements
or historical performance: the occurrence of any event, change or
other circumstances that could give rise to the right of one or
both of SWM and Neenah to terminate the merger agreement; the
outcome of any legal proceedings that may be instituted against
SWM, Neenah or their respective directors; the ability to obtain
regulatory approvals and meet other closing conditions to the
merger on a timely basis or at all, including the risk that
regulatory approvals required for the merger are not obtained on a
timely basis or at all, or are obtained subject to conditions that
are not anticipated or that could adversely affect the combined
company or the expected benefits of the transaction; the ability to
obtain approval by SWM shareholders and Neenah shareholders on the
expected terms and schedule; difficulties and delays in integrating
SWM and Neenah businesses; failing to fully realize anticipated
cost savings and other anticipated benefits of the merger when
expected or at all; business disruptions from the proposed merger
that will harm SWM’s or Neenah’s business, including current plans
and operations; potential adverse reactions or changes to business
relationships resulting from the announcement or completion of the
merger, including as it relates to SWM’s or Neenah’s ability to
successfully renew existing client contracts on favorable terms or
at all and obtain new clients; the substantial indebtedness SWM
expects to incur and assume in connection with the proposed
transaction and the need to generate sufficient cash flows to
service and repay such debt; the possibility that SWM may be unable
to achieve expected synergies and operating efficiencies within the
expected time-frames or at all and to successfully integrate
Neenah’s operations with those of SWM; failing to comply with the
applicable laws or legal or regulatory developments; inflation,
currency and interest rate fluctuations; the ability of SWM or
Neenah to retain and hire key personnel; the diversion of
management’s attention from ongoing business operations; the
duration and effects of the COVID-19 pandemic, general economic and
business conditions, particularly in the context of the COVID-19
pandemic; increases in maintenance and operating costs; security
threats; reliance on technology and related cybersecurity risk;
trade restrictions or other changes to international trade
arrangements; transportation of hazardous materials; various events
which could disrupt operations, including geopolitical events,
wars, conflicts, illegal blockades of rail networks, and natural
events such as severe weather, droughts, fires, floods and
earthquakes; climate change; labor negotiations and disruptions;
environmental claims; uncertainties of investigations, proceedings
or other types of claims and litigation; risks and liabilities
arising from derailments; timing and completion of capital
programs; uncertainty as to the long-term value of the common stock
of SWM following the merger, including the dilution caused by SWM’s
issuance of additional shares of its common stock in connection
with the transaction; the continued availability of capital and
financing following the merger; the business, economic and
political conditions in the markets in which SWM and Neenah
operate; and events beyond SWM’s or Neenah’s control, such as acts
of terrorism.
Any forward-looking statements speak only as of the date of this
communication or as of the date they were made, and neither SWM nor
Neenah undertakes any obligation to update forward-looking
statements. For a more detailed discussion of these factors, also
see the information under the captions “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” in SWM’s and Neenah’s most recent annual
reports on Form 10-K for the year ended December 31, 2021, and any
material updates to these factors contained in any of SWM’s and
Neenah’s future filings with the U.S. Securities and Exchange
Commission (the “SEC”).
As for the forward-looking statements that relate to future
financial results and other projections, actual results will be
different due to the inherent uncertainties of estimates, forecasts
and projections and may be better or worse than projected and such
differences could be material. Given these uncertainties, you
should not place any reliance on these forward-looking statements.
Annualized, pro forma, projected and estimated numbers are used for
illustrative purpose only, are not forecasts and may not reflect
actual results.
Additional Information and Where to Find It
In connection with the proposed merger, SWM will file with the
SEC a registration statement on Form S-4 to register the shares of
SWM’s common stock to be issued in connection with the merger. The
registration statement will include a joint proxy
statement/prospectus which will be sent to the shareholders of SWM
and Neenah seeking their approval of their respective
transaction-related proposals. INVESTORS AND SECURITY HOLDERS ARE
URGED TO READ THE REGISTRATION STATEMENT ON FORM S-4 AND THE
RELATED JOINT PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE
REGISTRATION STATEMENT ON FORM S-4, AS WELL AS ANY AMENDMENTS OR
SUPPLEMENTS TO THOSE DOCUMENTS AND ANY OTHER RELEVANT DOCUMENTS
FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED
MERGER, WHEN THEY BECOME AVAILABLE, BECAUSE THEY DO AND WILL
CONTAIN IMPORTANT INFORMATION ABOUT SWM, NEENAH AND THE PROPOSED
MERGER.
Investors and security holders may obtain copies of these
documents free of charge through the website maintained by the SEC
at www.sec.gov or from SWM at its website, www.swmintl.com, or from
Neenah at its website, www.neenah.com. Documents filed with the SEC
by SWM will be available free of charge by accessing SWM’s website
at www.swmintl.com under the heading Investor Relations, or,
alternatively, by directing a request by telephone or mail to SWM
at 100 North Point Center East, Suite 600, Alpharetta, Georgia
30022, Attention: Investor Relations (1-800-514-0186), and
documents filed with the SEC by Neenah will be available free of
charge by accessing Neenah’s website at www.neenah.com under the
heading Investor Relations or, alternatively, by directing a
request by telephone or mail to Neenah at 3460 Preston Ridge Road,
Alpharetta, Georgia 30005, Attention: Investor Relations:
(678-566-6500).
Participants in the Solicitation
SWM and Neenah and certain of their respective directors,
executive officers and other members of management and employees
may be deemed to be participants in the solicitation of proxies
from the shareholders of Neenah and SWM in connection with the
proposed merger under the rules of the SEC. Information about SWM’s
directors and executive officers is available in SWM’s proxy
statement dated March 18, 2022 for its 2022 Annual Meeting of
Shareholders. Information about Neenah’s directors and executive
officers is available in Neenah’s proxy statement dated April 9,
2021 for its 2021 Annual Meeting of Shareholders. Other information
regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security
holdings or otherwise, will be contained in the joint proxy
statement/prospectus and other relevant materials to be filed with
the SEC regarding the merger when they become available. Investors
should read the joint proxy statement/prospectus carefully when it
becomes available before making any voting or investment decisions.
You may obtain free copies of these documents from the SEC’s
website at www.sec.gov or from Neenah or SWM using the sources
indicated above.
No Offer or Solicitation
This communication shall not 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 such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220328005310/en/
Investor Contacts Neenah, Inc. Kyle Anderson Vice
President, Corporate Strategy and Investor Relations (678) 518-3278
investors@neenah.com
SWM International Mark Chekanow Director, Investor Relations
(770) 569-4229 investors@swmintl.com
Media Contacts Neenah, Inc. Missy Elam Director,
Corporate Communications media@neenah.com (678) 518-3263
SWM International Mary Gibson Director, Enterprise
Communications mgibson@swmintl.com (770) 569-4328
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