TIDMELM
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE
OR IN PART, IN OR INTO ANY OF THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR
SOUTH AFRICA OR INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.
THIS ANNOUNCEMENT IS NOT A PROSPECTUS BUT AN ADVERTISEMENT. INVESTORS SHOULD
NOT SUBSCRIBE FOR THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT ON THE
BASIS OF THE INFORMATION CONTAINED IN THE PROSPECTUS TO BE PUBLISHED BY
ELEMENTIS PLC AND AVAILABLE FROM ITS REGISTERED OFFICE IN DUE COURSE.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
Elementis plc
PROPOSED ACQUISITION OF MONDO MINERALS - ANNOUNCEMENT OF REVISED TERMS AND
LAUNCH OF 1 FOR 4 RIGHTS ISSUE AT 152.0 PENCE PER NEW ORDINARY SHARE TO RAISE
APPROXIMATELY $230 MILLION
Elementis plc ("Elementis") is pleased to announce the terms of a revised
agreement with Advent Mondo (Luxembourg) S.à r.l. ("Advent" or the "Seller") in
relation to the proposed acquisition (the "Acquisition") of Mondo Minerals
Holding B.V. ("Mondo").
The terms of the Acquisition originally announced on 29 June 2018 valued Mondo
at $600 million on a cash free, debt free basis, which represented a multiple
of 12.5 times adjusted EBITDA for the seven months ended 31 July 2018
(annualised), including the full run rate of modest pre-tax cost synergies and
based on an average exchange rate of $1.20 per euro.
Under the terms of the revised agreement, Elementis has agreed revised terms
which value Mondo at $500 million on a cash free, debt free basis. This
represents a multiple of 10.4 times adjusted EBITDA for the seven months ended
31 July 2018 (annualised), including the full run rate of modest pre-tax cost
synergies and based on an average exchange rate of $1.20 per euro. The
consideration payable on completion of the Acquisition ("Completion") will be
paid in cash.
In addition, up to EUR45.7 million ($53.0 million) in earn-out payments may be
payable following Completion, subject to the achievement of certain performance
targets by Mondo over a three financial year period ending on 31 December 2020.
Thus, if the performance targets are achieved in full, the terms of the revised
agreement would value Mondo at $553 million on a cash free, debt free basis.
This would represent a multiple of 8.8 times the Earn-Out Adjusted EBITDA that
Mondo would be required to achieve for the year ending 31 December 2020 to
trigger the final earn-out payment under the revised agreement. The Earn-Out
Adjusted EBITDA thresholds for the performance-based earn-out have been set to
allow for value to be shared between Elementis and the Seller in a scenario
where Mondo continues to deliver strong growth. Maximum earn-out payments would
be paid upon Mondo delivering Earn-Out Adjusted EBITDA growth relative to 2017
adjusted EBITDA of 38.4% in 2018, 55.0% in 2019 and 74.4% in 2020. No earn-out
payments would be payable in the relevant year in the scenario where Mondo's
Earn-Out Adjusted EBITDA growth relative to 2017 adjusted EBITDA is less than
30.1% in 2018, 41.2% in 2018 or 60.5% in 2020.
Elementis proposes to finance the Acquisition and associated expenses through a
combination of the proceeds of a fully underwritten rights issue to raise total
gross proceeds of the pounds sterling equivalent of approximately $230 million
(the "Rights Issue") and by utilising a new $775.0 million term and revolving
credit facilities agreement (the "Facilities Agreement"). It is expected that
approximately $600.0 million will be drawn under the Facilities Agreement at
Completion to fund part of the cash consideration for the Acquisition and to
refinance certain indebtedness of Mondo and Elementis.
The Rights Issue will be made on the basis of 1 New Ordinary Share at 152.0
pence per New Ordinary Share for every 4 Existing Ordinary Shares. Pursuant to
the Rights Issue, Elementis is proposing to offer up to 116,044,829 New
Ordinary Shares by way of rights to Qualifying Shareholders (other than,
subject to certain exceptions, Qualifying Shareholders resident or with
registered addresses in the United States or any of the Excluded Territories as
described in the Prospectus) at the close of business on 1 October 2018 (the "
Record Date"). The offer is to be made at 152.0 pence per New Ordinary Share
(the "Issue Price"), payable in full on acceptance by no later than 11.00 a.m.
on 18 October 2018. The Rights Issue is expected to raise gross proceeds of GBP
176.4 million (being the pounds sterling equivalent of approximately $230
million based on an exchange rate of $1.30 per pound sterling on 10 September
2018). The Issue Price represents a 34.7% discount to the theoretical ex-Rights
price calculated by reference to the closing price of 252.8 pence per Ordinary
Share on 10 September 2018. The Rights Issue, which is conditional on, amongst
other things, shareholder approval of the Acquisition, is fully underwritten by
UBS Limited and HSBC Bank plc.
Under the terms of the revised agreement, and based on the closing Elementis
share price of 252.8 pence and an exchange rate of $1.16 per euro as at 10
September 2018, the Acquisition is expected by the Directors to be accretive to
adjusted earnings per share in the first full year following Completion,
excluding any benefit other than modest pre-tax cost synergies. The Directors
also expect the Acquisition to generate a post-tax return on invested capital
above Elementis' weighted average cost of capital in the second full year
following Completion (excluding the benefit of revenue synergies).
On Completion, and assuming the Rights Issue completes and bank facilities are
drawn, it is estimated that the leverage for the Enlarged Group would be
approximately 2.50 times EBITDA. The Directors anticipate the strong cash
generation of the Enlarged Group to drive a material deleveraging profile
thereafter with leverage reducing to less than 2.00 times by the end of 2019.
Due to its size, the Acquisition is classified as a Class 1 transaction under
the Listing Rules and accordingly requires the approval of Elementis'
Shareholders. Elementis expects to publish a circular (the "Circular") and
prospectus (the "Prospectus") in connection with the Acquisition and Rights
Issue later today and to hold a Shareholders meeting to vote on the Acquisition
on 3 October 2018.
During a pre-sounding exercise conducted ahead of today's announcement,
Elementis has received strong support for the Acquisition from its top
Shareholders including a non-binding letter of intent from Threadneedle Asset
Management Limited (part of Ameriprise Financial, Inc.'s group) and an
irrevocable undertaking from APG Asset Management N.V. to vote in favour of the
Acquisition. In addition the company has received written confirmation of
support from a further two of its top five Shareholders.
Paul Waterman, CEO of Elementis, said: "Mondo Minerals is a high quality
business with significant opportunities for future growth. Following engagement
with our shareholders, we have agreed terms of a revised deal with Advent that
we believe represents compelling value. We remain excited by Mondo's prospects
and the significant opportunities we believe this acquisition will unlock for
Elementis."
The Elementis directors have confirmed it is their intention unanimously to
recommend that Shareholders vote in favour of the Acquisition, and each of the
Elementis directors who holds shares in Elementis has confirmed they intend to
take up their rights in full in the Rights Issue.
This summary should be read together with the more detailed information in the
longer announcement following the Important Notices below. To the extent not
otherwise defined, capitalised terms used in this announcement have the meaning
given to them in the Definitions section at the end of this announcement.
Analyst/Investor enquiries:
Elementis plc
Investors: James Curran, Investor Relations +44 (0) 207 067 2994
Tulchan
Martin Robinson +44 (0) 207 353 4200
Sheebani Chothani +44 (0) 207 353 4200
UBS (Joint Global Coordinator, Joint Bookrunner, Sole Corporate Broker and Sole
Sponsor to Elementis)
Rahul Luthra +44 (0) 207 567 8000
Christopher Smith
Alistair Smith
HSBC (Joint Global Coordinator and Joint Bookrunner to Elementis)
Mark Dickenson +44 (0) 207 991 8888
Sam Barnett
Evercore (Financial Advisor to Elementis)
Tom Massey +44 (0) 207 046 6741
Kirtan Pansari +44 (0) 207 046 6761
OGG Consulting (Transaction consultant)
Oli Greaves +44 7795 505 663
Important Notices
This announcement has been issued by and is the sole responsibility of the
Company. This announcement is not a circular or a prospectus but an
advertisement and investors should not acquire any Nil Paid Rights, the Fully
Paid Rights or New Ordinary Shares referred to in this announcement except on
the basis of the information contained in the Circular and Prospectus to be
published by the Company in connection with the Acquisition and the Rights
Issue in due course. The information contained in this announcement is for
background purposes only and does not purport to be full or complete. The
information in this announcement is subject to change. Copies of the Circular
and Prospectus when published will be available from the registered office of
the Company and on the Company's website, provided that such Circular and
Prospectus will not, subject to certain exceptions, be available to certain
Shareholders in certain restricted or Excluded Territories. The Circular and
Prospectus will give further details of the Acquisition and the Rights Issue.
This announcement is for information purposes only and is not intended to and
does not constitute or form part of any offer to sell or issue, or any
solicitation of an offer to purchase, subscribe for or otherwise acquire, any
securities in the United States or any other jurisdiction. The information
contained in this announcement is not for release, publication or distribution
to persons in, and should not be distributed, forwarded to or transmitted in or
into, the United States, Australia, Canada, Japan, South Africa or any other
jurisdiction where to do so might constitute a violation of local securities
laws or regulations.
The securities referred to herein have not been and will not be registered
under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or
under the securities legislation of any state or other jurisdiction of the
United States or under the applicable securities laws of Australia, Canada,
Japan or South Africa. The securities referred to herein may not be offered or
sold in the United States except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act
and in compliance with any applicable securities laws of any state or other
jurisdiction of the United States. There has been and will be no public
offering of the securities referred to herein in the United States.
The distribution of this announcement into jurisdictions other than the United
Kingdom may be restricted by law, and, therefore, persons into whose possession
this announcement comes should inform themselves about and observe any such
restrictions. Any failure to comply with any such restrictions may constitute a
violation of the securities laws of such jurisdiction. In particular, this
announcement, the Circular and Prospectus (once published) and the provisional
allotment letters (once printed) should not, subject to certain exceptions, be
distributed, forwarded to or transmitted in or into the United States,
Australia, Canada, Japan, South Africa or any other restricted or excluded
territories or any jurisdiction where to do so would be unlawful.
This announcement does not constitute a recommendation concerning any
investor's decision or options with respect to the Acquisition or the Rights
Issue. The price and value of securities can go down as well as up. Past
performance is not a guide to future performance. The contents of this
announcement are not to be construed as legal, business, financial or tax
advice. Each shareholder or prospective investor should consult his, her or its
own independent legal adviser, business adviser, financial adviser or tax
adviser for legal, financial, business or tax advice.
UBS Limited and HSBC Bank plc (together, the "Underwriters"), each of which is
authorised by the Prudential Regulation Authority (the "PRA") and regulated in
the United Kingdom by the PRA and the Financial Conduct Authority (the "FCA"),
are each acting for the Company and for no one else in connection with the
Acquisition and the Rights Issue, and will not regard any other person as a
client in relation to the Acquisition and the Rights Issue and will not be
responsible to anyone other than the Company for providing the protections
afforded to their respective clients, nor for providing advice in connection
with the Acquisition, the Rights Issue or any other matter, transaction or
arrangement referred to in this announcement.
Apart from the responsibilities and liabilities, if any, which may be imposed
on the Underwriters by the FSMA or the regulatory regime established
thereunder, neither of the Underwriters nor any of their respective affiliates
accepts any responsibility or liability whatsoever and makes no representation
or warranty, express or implied, for the contents of this announcement,
including its accuracy, fairness, sufficiency, completeness or verification or
for any other statement made or purported to be made by it, or on its behalf,
in connection with the Company or the Acquisition or the Rights Issue and
nothing in this announcement is, or shall be relied upon as, a promise or
representation in this respect, whether as to the past or future. Each of the
Underwriters and their respective affiliates accordingly disclaims to the
fullest extent permitted by law all and any responsibility and liability
whether arising in tort, contract or otherwise (save as referred to above)
which it might otherwise have in respect of this announcement or any such
statement. Furthermore, each of the Underwriters and/or their affiliates
provides various investment banking, commercial banking and financial advisory
services from time to time to the Company.
No person has been authorised to give any information or to make any
representations other than those contained in this announcement and, when
published, the Circular and Prospectus and, if given or made, such information
or representations must not be relied on as having been authorised by the
Company, UBS or HSBC. Subject to the Listing Rules, the Prospectus Rules and
the Disclosure Guidance and Transparency Rules of the FCA, the issue of this
announcement shall not, in any circumstances, create any implication that there
has been no change in the affairs of the Company since the date of this
announcement or that the information in it is correct as at any subsequent
date.
Each of the Underwriters and/or their respective affiliates, acting as
investors for their own accounts, may, in accordance with applicable legal and
regulatory provisions, engage in transactions in relation to the Nil Paid
Rights, the Fully Paid Rights, the New Ordinary Shares and/or related
instruments for their own account for the purpose of hedging their underwriting
exposure or otherwise. Except as required by applicable law or regulation, the
Underwriters and their respective affiliates do not propose to make any public
disclosure in relation to such transactions.
This announcement contains certain forecasts, projections and other
forward-looking statements (i.e., all statements other than statements of
historical fact) in relation to, or in respect of the financial condition,
operations or businesses of the Group and/or Mondo. Statements containing the
words "expect", "anticipate", "intends", "plan", "estimate", "aim", "forecast",
"project" and similar expressions (or their negative) identify certain of these
forward-looking statements. Any such statements involve risk and uncertainty
because they relate to future events and circumstances and are based on current
assumptions and depend on circumstances that may or may not occur in the future
and may cause the actual results, performance or achievements to be materially
different from those expressed or implied by such forward-looking statements.
There are many factors that could cause actual results or developments to
differ materially from those expressed or implied by any such forward looking
statements, including, but not limited to, matters of a political, economic,
business, competitive or reputational nature. Past performance should not be
taken as an indication or guarantee of future results, and no representation or
warranty, express or implied, is made regarding future performance. No
statement in this announcement should be construed as a profit estimate or
profit forecast. Neither the Company nor any other person undertakes any
obligation to update or revise any forward looking statement to reflect any
change in circumstances or expectations.
Information to Distributors
Solely for the purposes of the product governance requirements contained
within: (a) EU Directive 2014/65/EU on markets in financial instruments, as
amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive
(EU) 2017/593 supplementing MiFID II; and (c) local implementing measures
(together, the "MiFID II Product Governance Requirements"), and disclaiming all
and any liability, whether arising in tort, contract or otherwise, which any
"manufacturer" (for the purposes of the MiFID II Product Governance
Requirements) may otherwise have with respect thereto, the Nil Paid Rights, the
Fully Paid Rights and the New Ordinary Shares have been subject to a product
approval process, which has determined that they each are: (i) compatible with
an end target market of retail investors and investors who meet the criteria of
professional clients and eligible counterparties, each as defined in MiFID II;
and (ii) eligible for distribution through all distribution channels as are
permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the
Target Market Assessment, Distributors should note that: the price of the Nil
Paid Rights, the Fully Paid Rights and/or the New Ordinary Shares may decline
and investors could lose all or part of their investment; the Nil Paid Rights,
the Fully Paid Rights and the New Ordinary Shares offer no guaranteed income
and no capital protection; and an investment in the Nil Paid Rights, the Fully
Paid Rights and/or the New Ordinary Shares is compatible only with investors
who do not need a guaranteed income or capital protection, who (either alone or
in conjunction with an appropriate financial or other adviser) are capable of
evaluating the merits and risks of such an investment and who have sufficient
resources to be able to bear any losses that may result therefrom. The Target
Market Assessment is without prejudice to the requirements of any contractual,
legal or regulatory selling restrictions in relation to the offer. Furthermore,
it is noted that, notwithstanding the Target Market Assessment, the
Underwriters will only procure investors who meet the criteria of professional
clients and eligible counterparties. For the avoidance of doubt, the Target
Market Assessment does not constitute: (a) an assessment of suitability or
appropriateness for the purposes of MiFID II; or (b) a recommendation to any
investor or group of investors to invest in, or purchase, or take any other
action whatsoever with respect to the Nil Paid Rights, the Fully Paid Rights
and/or the New Ordinary Shares. Each distributor is responsible for undertaking
its own target market assessment in respect of the Nil Paid Rights, the Fully
Paid Rights and/or the New Ordinary Shares and determining appropriate
distribution channels.
Capitalised terms used in this Important Notices section and not otherwise
defined in this Announcement shall be ascribed the meaning given thereto in the
Circular and Prospectus.
ELEMENTIS PLC
PROPOSED ACQUISITION OF MONDO MINERALS - ANNOUNCEMENT OF REVISED TERMS AND
LAUNCH OF 1 FOR 4 RIGHTS ISSUE AT 152.0 PENCE PER NEW ORDINARY SHARE TO RAISE
APPROXIMATELY $230 MILLION
1. Introduction
On 29 June 2018, Elementis announced that it reached an agreement in principle
in relation to the Acquisition of Mondo from Advent.
The Mondo Group is a leading integrated producer of industrial talc, with a
focus on the premium segment, owned by funds controlled by Advent International
since 2011. The Mondo Group has a strong track record of growth and creates
uniform, high purity products from its high quality resource base. In 2017 the
Mondo Group had revenue of EUR122.2 million and adjusted EBITDA of EUR31.1 million
with an adjusted EBITDA margin of 25.5%. The Directors believe the Mondo
Group's business has attractive growth prospects and is showing good momentum
in the current year. Revenue increased by 17.6% to EUR71.2 million for the six
months ended 30 June 2018 from EUR60.6 million for the six months ended 30 June
2017.
The Directors believe the Acquisition is strategically compelling for Elementis
as there is significant value creation potential from the integration of Mondo
into the Elementis Group following Completion.
The Directors believe that the Mondo Group is an attractive, high quality
business with differentiated market positioning and strong competitive
advantages. Talc provides mission critical properties at a relatively low cost
to a diverse range of industrial end markets that have a strong track record
of, and prospects for, growth. The Mondo Group has longstanding relationships
with its customers and its focus on quality, reliability and differentiated
service enables it to optimise pricing to reflect the value of the solutions
provided by the Mondo Group. Underpinned by its high quality, long duration
talc resources, Mondo utilises proprietary flotation process know how and
formulation expertise to deliver superior product quality and consistency. In
combination with the global distribution platform and formulation expertise of
Elementis, there is significant opportunity for value creation by bringing
Mondo to the Enlarged Group.
Due to its size, the Acquisition is classified as a Class 1 transaction under
the Listing Rules and accordingly requires the approval of Shareholders. A
notice of the General Meeting to be held on 3 October 2018, at which
Shareholders' approval will be sought for the Acquisition, will be set out in
Circular which is, subject to FCA approval, expected to be dispatched today.
The terms of the Acquisition originally announced by Elementis on 29 June 2018
valued Mondo at $600 million on a cash free, debt free basis, which represented
a multiple of 12.5 times adjusted EBITDA for the seven months ended 31 July
2018 (annualised), including the run rate of modest pretax cost synergies and
based on an average exchange rate of $1.20 per euro. Elementis subsequently
received feedback from Shareholders that led the Directors to conclude there
was insufficient support amongst Shareholders for the Acquisition to be
approved on the originally announced terms.
Accordingly, Elementis entered into negotiations with the Seller with a view to
revising the terms of the Acquisition. On 11 September 2018 Elementis announced
revised terms for the Acquisition, which value Mondo at $500 million on a cash
free, debt free basis, which represents a multiple of 10.4 times adjusted
EBITDA for the seven months ended 31 July 2018 (annualised), including the run
rate of modest pre-tax cost synergies and based on an average exchange rate of
$1.20 per euro.
In addition under the Sale and Purchase Agreement, up to EUR45.7 million ($53.0
million) in earn-out payments will be payable following Completion, subject to
the achievement of certain Earn-Out Adjusted EBITDA thresholds over a three
financial year period ending on 31 December 2020 and certain reduction (based
on the performance in the first and second financial year periods) and carry
forward (based on the performance in the second and third financial year
periods) features. If the performance targets are achieved in full, the terms
of the Acquisition would value Mondo at $553 million on a cash free, debt free
basis, which would represent a multiple of 8.8 times the Earn-Out Adjusted
EBITDA that Mondo would be required to achieve for the year ending 31 December
2020 to trigger the final earn-out payment under the Sale and Purchase
Agreement.
The Earn-Out Adjusted EBITDA thresholds of the performance-based earn-out have
been set to allow for value to be shared between Elementis and the Seller in a
scenario where Mondo continues to deliver strong performance. For the maximum
earn-out payments to be paid, Mondo would need to deliver Earn-Out Adjusted
EBITDA growth relative to 2017 adjusted EBITDA of 38.4% in 2018, 55.0% in 2019
and 74.4% in 2020. No earn-out payments would be payable in respect of the
relevant year in the scenario where Mondo's Earn-Out Adjusted EBITDA growth
relative to 2017 adjusted EBITDA is less than 30.1% in 2018, 41.2% in 2019 or
60.5% in 2020.
The Company proposes to finance the Acquisition and associated expenses through
a combination of the proceeds of the Rights Issue to raise total gross proceeds
of the pounds sterling equivalent of approximately $230 million (GBP176.4
million), and by utilising the new $775.0 million Facilities Agreement,
consisting of a $400.0 million equivalent multicurrency term loan facility (the
"Term Facility") and a $375.0 million multi-currency revolving credit facility
(the "Revolving Credit Facility", and together with the Term Facility, the "New
Debt Facilities"). It is expected that approximately $600.0 million will be
drawn under the New Debt Facilities at Completion to fund part of the cash
consideration for the Acquisition and to refinance certain indebtedness of the
Mondo Group and the Elementis Group.
2. Summary information on Mondo
The Mondo Group is a leading mine-to-market producer of talc and other mineral
products with a strong presence in Northern and Central Europe and a growing
customer base in Eastern Europe, Southern Europe, South America and Asia. The
Mondo Group supplies talc to customers operating in a wide range of end
markets, including industrial sectors (e.g., plastics, paints & coatings,
technical ceramics, life sciences) and paper sectors (e.g., paper filler, paper
coatings). The Mondo Group use proprietary flotation process know how and
formulation expertise to deliver superior product quality and consistency to
its customers.
The Mondo Group employs approximately 226 full time employees (as at 30 June
2018) and owns and operates four talc mines in Finland with total resources of
over 90 years at current levels of production and has four production
facilities in Finland and the Netherlands. The Directors believe that the Mondo
Group has high quality employees and an experienced management team with a
proven track record of repositioning the business and delivering growth. In
recent years the Mondo Group has focused on higher value industrial talc
segments, which have higher contribution margins per tonne than paper talc
segments, and expanding in international markets. For the six months ended 30
June 2018, revenue from industrial talc represented 79.5% of the Mondo Group's
revenue (compared to approximately 51% for the year ended 31 December 2009).
Customers in Europe represented 83.6% of Mondo's revenue by geography for the
year ended 31 December 2017.
For the six months ended 30 June 2018, the Mondo Group had revenue of EUR71.2
million and operating profit of EUR9.7 million. For the year ended 31 December
2017, the Mondo Group had revenue of EUR122.0 million and operating profit of EUR
15.4 million. Gross assets of the Mondo Group as at 31 December 2017 were EUR
341.4 million.
Key strengths of the Mondo Group include:
* A leading global supplier of premium talc-based product
+ Amongst leading players globally to serve higher-end talc applications
* Value-based pricing model based on tailored customer service and stringent
qualification
requirements
+ Customised products tailored to specific client formulation with
pricing differentiated by application
+ Rigorous supplier qualification process with customers resulting in
long-term client relationships
* Strong growth track-record with 80% of sales in high-end industrial talc
+ Mondo 2013-17 industrial talc sales compound annual growth rate
("CAGR") of 8% vs. 5% market
+ Favourable structural trends driving talc application growth above
underlying end markets
* Continuous focus on innovation fuelling growth with a solid pipeline of new
projects
+ Unlocking opportunities through new product launches in Coatings and
Personal Care
+ Production and supply chain innovation to increase operational
efficiency
* Track-record of stable adjusted EBITDA and cash generation through economic
cycles
+ The Directors believe this shows resilient performance during the
global financial crisis
+ Shift to industrial talc drives contribution margin expansion and
absolute adjusted EBITDA growth
* High quality resource base with long life of mine and strategic locations
+ Over 90 years of owned resources with limited capex requirements
+ 90% of sales utilise flotation-purified talc from Mondo's own talc ore
resources
3. Background to and reasons for the Acquisition
The Elementis Group is a global specialty chemicals company and when
considering potential acquisition opportunities seeks businesses from which it
can create long-term value and that have sustainable competitive advantages,
good growth prospects and which leverage the Elementis Group's existing
capabilities. The Elementis Group focuses on targets that represent high-value
intermediates that are a low percentage of an end product's cost, but
critically important to performance. In the case of the Mondo Group, the
Directors believe that the Acquisition represents an exceptional opportunity to
add a leading talc producer that is underpinned by sustainable competitive
advantages and significant growth opportunities. The Directors believe that the
strategic rationale for the Acquisition is compelling:
Mondo is a premium supplier of talc with close customer relationships
underpinned by structural advantages and a focus on quality and reliability
The Mondo Group is a high quality business with a leading competitive position
centred on multiple
structural advantages. Through high quality, long duration talc resources
located in Finland, Mondo is a fully integrated operation addressing high end
industrial applications. These high grade talc deposits, which have over 90
years of total resource life, are one of only two known deposits of scale in
Europe. As a result of optimised upstream and downstream logistics from plants
in Finland and the Netherlands, Mondo has an industry leading cost structure
from which to serve dynamic end markets around the world.
The Mondo Group aims to deliver superior product quality and consistency
through its well invested
assets, proprietary flotation process know how, precise control over
performance properties and formulation expertise. This quality of output allows
Mondo to focus on high value talc applications, an area which commands premium
margins and notable demand growth. There is a rigorous supplier qualification
process that renders switching between talc suppliers a costly and time
consuming process and which enables Mondo to develop custom formulations for
key accounts' specifications.
Mondo serves resilient and high growth end markets
Talc is the softest known mineral and its unique attributes provide mission
critical properties at a relatively low cost to a diverse range of industrial
applications including coatings and long life plastics. The Company believes
that the market for targeted industrial talc applications has grown at
approximately 5% CAGR over the last five years, and expects this to accelerate
to approximately
7% per annum through to 2023, driven by the continued increase in talc
penetration and trends towards higher value specialty talc. Favourable
structural trends are expected to support this market growth and include the
reduction in weight of vehicles and the increased use of talc in life sciences.
The Mondo Group's revenue from targeted industrial applications has grown at a
9% CAGR since 2009 and in 2017 represented approximately 79% of revenue,
compared to approximately 64% in 2013. In 2017 the contribution margin per
tonne of industrial talc represented approximately 60% more than the
contribution margin of paper talc. Revenue growth at or above the market for
industrial talc is expected to be supported by an encouraging innovation
pipeline, expansion into new high growth verticals such as life sciences and
anticipated favourable structural trends, including an increase in the
percentage share of plastics in automobiles by 2025.
A complementary combination with strong value creation opportunity and synergy
potential
Aligned with Elementis' hectorite based value chain, Mondo leverages access to
a scarce, high quality natural resource to create products that serve diverse
end markets. The Company believes that clear areas of complementarity exist,
from mineral extraction to formulation expertise, application driven research
and development, through to end markets and customers, notably coatings, which
both Elementis and Mondo serve. The combination with Mondo is expected to
improve Elementis' position as a higher quality, higher margin company with
attractive growth potential, consistent with Elementis' "Reignite Growth"
strategy.
The Directors believe Mondo is well positioned to grow at or above the positive
trend in industrial talc applications by developing its position in high end
talc markets. Opportunities are available based on Elementis' global knowledge,
scale and relationships to unlock additional value and further growth.
The Directors expect that, as a result of the Acquisition, the Enlarged Group
will be able to realise
approximately $20-25 million of revenue synergies by the end of 2023. Following
an initial integration period, a significant majority of the identified
synergies would be achieved between the financial years ending 31 December 2020
and 2023.
The revenue synergies identified over the medium term comprise approximately
$10-15 million in the Coatings business of the Enlarged Group and approximately
$10 million in the Personal Care business of the Enlarged Group. The revenue
synergies of approximately $10-15 million in the Enlarged Group's Coatings
business are anticipated to arise primarily through geographic expansion
utilising global sales and technical services relationships of the Elementis
Group to increase market share of the Mondo Group's industrial coatings in
North America and Latin America, and also through deepening strategic
relationships with existing customers of the Elementis Group for the sale of
talc and increasing share of wallet. The revenue synergies of approximately $10
million in the Enlarged Group's Personal Care business are anticipated to arise
primarily through enhanced access for the Mondo Group to world leading personal
care formulators and distributors and strengthening partnerships with the
Elementis Group's top multi-national customers outside of Europe, as well as an
expansion to new markets in Asia and the Americas utilising local sales,
distribution and logistics networks and greater sales coverage within Europe.
Revenue synergies in the Enlarged Group's Personal Care business are also
expected to be achieved through an extension of the product portfolio of
attractive cosmetic applications.
In addition to the $20-25 million of revenue synergies identified, the
Directors expect the Acquisition to unlock new business opportunities for the
Elementis Group through its expertise in surface chemistry modification and the
utilisation of talc in formulations. The Directors expect that the Enlarged
Group will also benefit from modest pre-tax cost synergies through a single
corporate overhead structure, a "best of both" approach to non-product related
procurement costs and certain consolidation opportunities.
The total quantified revenue synergies of $20-25 million are equivalent to
2.2-2.7% of the pro forma revenue of the Enlarged Group for the year ended 31
December 2017 of approximately $919.7 million.
The expected synergies identified reflect both the beneficial elements and
relevant costs. No significant implementation costs are expected to be incurred
in order to achieve the revenue synergies in the Coatings and Personal Care
businesses of the Enlarged Group. The expected synergies would accrue as a
direct result of the success of the Acquisition and could not be achieved
independently by the Elementis Group.
4. Financial effects of the Rights Issue and the Acquisition
Mondo has an attractive financial profile with significant growth potential,
adjusted EBITDA margins of 25.5% for the year ended 31 December 2017 and strong
free cash flow generation. The Directors believe the Acquisition will be
financially attractive for Elementis' Shareholders taking into account the
terms of the Acquisition and the outlook for the business. The highly
attractive adjusted EBITDA margins that Mondo has delivered mean that the
Acquisition is expected to be immediately accretive to Elementis' EBITDA
margin.
Based on the closing Elementis share price of 252.8 pence and an exchange rate
of $1.16 per euro as at 10 September 2018, the Acquisition is expected by the
Directors to be accretive to adjusted earnings per share in the first full year
following Completion, excluding any benefit other than modest pre-tax cost
synergies. The Directors also expect the Acquisition to generate a post-tax
return on invested capital above the Elementis Group's weighted average cost of
capital in the second full year following Completion (excluding the benefit of
revenue synergies).
On Completion, and assuming the Rights Issue completes and bank facilities are
drawn, it is estimated that the leverage for the Enlarged Group would be
approximately 2.50 times EBITDA. The Directors anticipate the strong cash
generation of the Enlarged Group to drive a material deleveraging profile
thereafter with leverage reducing to less than 2.00 times by the end of 2019.
5. Financing the Acquisition
The Acquisition (and associated expenses) is proposed to be financed through
(i) the Rights Issue of approximately $230 million (GBP176.4 million), which has
been fully underwritten; and (ii) utilising the $775.0 million New Debt
Facilities.
The initial aggregate cash consideration payable in connection with the
Acquisition is approximately $307.2 million, subject to certain adjustments. It
is expected that the cash consideration for the Acquisition will be satisfied
primarily through the proceeds of approximately $230 million from the Rights
Issue. In addition, it is expected that approximately $600.0 million will be
drawn under the New Debt Facilities at Completion to fund part of the cash
consideration for the Acquisition and to refinance certain indebtedness of the
Mondo Group and the Elementis Group.
Given the scale and size of the proposed Acquisition, the Directors believe
they have taken a prudent approach to structuring and financing of the
Acquisition and associated expenses through a mixture of equity and debt. This
structure allows Elementis to retain financial strength and flexibility in
respect of potential future business developments.
The Board decided on the Rights Issue as a means of raising capital as this
would ensure that Qualifying Shareholders (other than, subject to certain
exceptions, Qualifying Shareholders resident or with registered addresses in
the United States or any of the Excluded Territories) subscribe for all of the
New Ordinary Shares to which they are entitled, their shareholdings would not
be diluted as a result of the financing arrangements for the Acquisition.
The Directors intend to apply the proceeds of the Rights Issue to fund part of
the consideration for the Acquisition, together with the associated transaction
and Acquisition costs. The net proceeds of the Rights Issue will be placed on
deposit pending Completion. If Completion does not take place before midnight
on 31 December 2018, the Directors would seek to return some or all of the net
proceeds of the Rights Issue to investors in a timely and tax-efficient manner,
use the net proceeds of the Rights Issue to repay existing indebtedness of the
Elementis Group or for general corporate purposes, or a combination thereof.
6. Dividend policy
The Company introduced a new progressive dividend policy following the
acquisition of SummitReheis in 2017 to reflect the Company's movement from a
net cash to a net debt position. In respect of the year ended 31 December 2017,
the Company's dividend per Ordinary Share was 8.80 cents (2016: 8.45 cents).
The Directors understand the importance of dividend payments to Shareholders
and, reflecting the
confidence that the Directors have in the benefits of the Acquisition, it is
intended that, following
Completion of the Acquisition, the Elementis Group will maintain its existing
dividend policy (after
rebasing for the bonus element of the Rights Issue), underpinned by the strong
cash generation and future prospects of the Enlarged Group. The New Ordinary
Shares, when issued and fully paid, will rank pari passu in all respects with
the Existing Ordinary Shares, including the right to receive
dividends. The New Ordinary Shares will not be eligible for the interim
dividend of 2.95 cents per
Ordinary Share announced by the Company on 31 July 2018.
The Directors remain, therefore, committed to the dividend policy outlined at
the 2017 annual results, namely a progressive ordinary dividend, normally with
dividend cover of at least two times adjusted earnings and to seek to make
additional returns when leverage falls below one times EBITDA. Since the
SummitReheis acquisition, Elementis has reduced its leverage ratio while also
continuing to invest and grow its annual ordinary dividend. Consequently, the
Directors are confident in the Enlarged Group's ability to grow ordinary
dividends and reduce leverage.
7. Current trading, trends and prospects
7.1 Elementis
In the period since 30 June 2018, the Elementis Group has continued to trade in
line with management expectations. As stated in the Elementis interim results
announcement on 31 July 2018, the Directors see significant potential for
Elementis. The management team is focused on the delivery of the Reignite
Growth strategy and are building financial and strategic momentum. Elementis is
on track and confident of making further progress in 2018.
The Directors aspire for the Elementis Group following the Acquisition to
return to 2017 levels of return on operating capital employed (defined as
operating profit after adjusting items divided by operating capital employed,
expressed as a percentage) by 2020.
7.2 Mondo
In the period since 30 June 2018, the Mondo Group has continued to trade in
line with management expectations. The Directors expect the Mondo Group's
revenue for the year ending 31 December 2018 to increase by approximately 15%
as compared to the year ended 31 December 2017, driven primarily by gains with
existing customers (including as a result of expanding to new geographies with
existing customers and new product innovations such as low oil absorption and
heat treated talc), gains with new customers (including as a result of first
volumes with new plastics customers, new formulations for new coatings
customers, and food, cosmetics and drug excipients for new life science
customers) and growth from other mineral co-products (including as a result of
nickel concentrate sales and improvement of floatation yields).
Over the medium term, the Directors expect the Mondo Group's revenue to
increase by approximately 5-7% per annum, excluding the impact of expected
synergies. The Directors expect the Mondo Group's adjusted EBITDA margin to be
driven over the medium term by a number of factors, including continuation of
the positive product mix shift toward industrial talc, fixed costs (excluding
the impact of expected synergies) growing at a slower rate than revenue and the
realisation of modest cost synergies. Over the medium term, the Directors
expect the Mondo Group to have approximately EUR10-11 million of recurring
capital expenditure per annum and an effective tax rate in the low 20s(%).
8. Principal Terms of the Acquisition
On 13 August 2018, Elementis, Elementis Holdings Limited (the "Purchaser") and
the Seller entered into a sale and purchase agreement in connection with the
acquisition of the entire issued share capital of Mondo. On 11 September 2018,
the Purchaser and the Seller agreed to revise the terms of the Acquisition,
which now value Mondo at $500 million on a cash free, debt free basis. In
addition, up to EUR45.7 million ($53.0 million) in earn-out payments will be
payable following Completion, subject to the achievement of the Earn-Out
Adjusted EBITDA thresholds over a three financial year period ending on 31
December 2020 and certain reduction (based on the performance in the first and
second financial year periods) and carry forward (based on the performance in
the second and third financial year periods) features (the "Earn-Out
Consideration").
The following table shows the Earn-Out Consideration for 2018, 2019 and 2020
based on each year's Earn-Out Adjusted EBITDA, together with the percentage
growth relative to 2017 adjusted EBITDA (and on the basis that no reduction or
carry forward features apply).
2018 Earn-Out Adjusted EBITDA
($m)
47.0 48.0 49.0 50.0
Earn-out Consideration ($m)...................... 0.0 1.0 2.0 3.0
% increase vs. 2017 adjusted EBITDA...... 30% 33% 36% 38%
2019 Earn-Out Adjusted EBITDA ($m)
51.0 52.0 53.0 54.0 55.0 56.0
Earn-out Consideration 0.0 5.0 10.0 15.0 20.0 25.0
($m)......................
% increase vs. 2017 adjusted 41% 44% 47% 49% 52% 55%
EBITDA......
2020 Earn-Out Adjusted EBITDA ($m)
58.0 59.0 60.0 61.0 62.0 63.0
Earn-out Consideration 0.0 5.0 10.0 15.0 20.0 25.0
($m)......................
% increase vs. 2017 adjusted 61% 63% 66% 69% 72% 74%
EBITDA......
Under the terms of the Sale and Purchase Agreement, and subject to certain
conditions, the entire issued share capital of Mondo shall transfer to
Elementis Holdings Limited at Completion.
Completion of the Acquisition is conditional upon:
* the approval of the Acquisition (as a Class 1 transaction under the Listing
Rules) by Shareholders
* passing an ordinary resolution at a general meeting; and
* the approval of the relevant anti-trust authorities in Brazil and Germany
having been obtained;
The approval of the anti-trust authorities in Brazil and Germany was obtained
on 8 August 2018 and 25 July 2018, respectively.
9. Principal terms of the Rights Issue
Elementis is proposing to raise proceeds of approximately $230 million (GBP176.4
million) from the Rights Issue which will be used to fund part of the cash
consideration for the Acquisition. The Rights Issue will comprise the issue of
116,044,829 New Ordinary Shares (representing approximately 25% of the existing
issued share capital of the Company and, assuming no additional shares are
issued by the Company prior to completion of the Rights Issue, approximately
20% of the enlarged issued share capital immediately following completion of
the Rights Issue) through a 1 for 4 Rights Issue at 152.0 pence per New
Ordinary Share. Dealings in the New Ordinary Shares (nil-paid) are expected to
commence at 8.00 a.m. on 4 October 2018, the first trading day after the
approval of the Acquisition by Shareholders at the General Meeting.
The Rights Issue is to be made at 152.0 pence per New Ordinary Share, payable
in full on acceptance by no later than 11.00 a.m. on 18 October 2018. The
Rights Issue Price represents a 34.7% discount to the theoretical ex-Rights
price based on the closing middle-market price of 252.8 pence per Ordinary
Share on 10 September 2018.
Pursuant to the Rights Issue, the Company is proposing to offer up to
116,044,829 New Ordinary Shares to Qualifying Shareholders other than, subject
to certain exceptions, Qualifying Shareholders resident or with registered
addresses in the United States or any of the Excluded Territories. The Rights
Issue will be made on the basis of 1 New Ordinary Share at 152.0 pence per New
Ordinary Share for every 4 Existing Ordinary Shares held by such Qualifying
Shareholders at the close of business on the Record Date. Entitlements to New
Ordinary Shares will be rounded down to the nearest whole number and fractional
entitlements will not be allotted to Shareholders and will be disregarded.
The New Ordinary Shares, when issued and fully paid, will rank pari passu in
all respects with the Existing Ordinary Shares, including the right to receive
dividends or distributions made, paid or declared after the date of issue of
the New Ordinary Shares. The New Ordinary Shares will not be eligible for the
interim dividend of 2.95 cents per Ordinary Share announced by the Company on
31 July 2018.
The New Ordinary Shares to be issued pursuant to the Rights Issue are
underwritten by UBS and HSBC pursuant to the underwriting agreement entered
into between Elementis, UBS and HSBC dated 11 September 2018 (the "Underwriting
Agreement").
The Rights Issue is conditional upon, inter alia:
* the Sale and Purchase Agreement not having been terminated and none of the
conditions precedent to Completion set out therein having become incapable
of satisfaction prior to admission of the New Ordinary Shares, nil paid, to
the premium listing segment of the Official List and to trading on the
London Stock Exchange's main market for listed securities ("Admission");
* the passing of the Resolution;
* the Underwriting Agreement not having been terminated prior to becoming
unconditional; and
* Admission occurring by no later than 8.00 a.m. on 4 October 2018 or such
later time and/or date as may be agreed between the Company and the
Underwriters, not being later than 8.00 a.m. on 18 October 2018.
Elementis can give notice that it wishes to terminate the Sale and Purchase
Agreement prior to completion of the Acquisition if certain conditions, as
detailed within the Sale and Purchase Agreement, are not satisfied. It is
therefore possible that the Rights Issue could proceed but the Acquisition does
not. If that situation were to arise, the Directors would seek to return some
or all of the net proceeds of the Rights Issue to investors in a timely and
tax-efficient manner, use the net proceeds of the Rights Issue to repay
existing indebtedness of the Elementis Group or for general corporate purposes,
or a combination thereof.
Applications will be made to the UKLA for the New Ordinary Shares to be
admitted to the premium listing segment of the Official List and to the London
Stock Exchange for the New Ordinary Shares to be admitted to trading on the
London Stock Exchange's main market for listed securities. It is expected that
Admission will become effective and that dealings in the New Ordinary Shares,
nil paid, will commence by 8.00 a.m. on 4 October 2018 and in the New Ordinary
Shares, fully paid, by 8.00 a.m. on 19 October 2018.
10. Overseas Shareholders
New Ordinary Shares will be provisionally allotted (nil paid) to all Qualifying
Shareholders on the register at the Record Date, including Overseas
Shareholders. However, subject to certain exceptions, Provisional Allotment
Letters will not be sent to Qualifying Non-CREST Shareholders resident or with
registered addresses in the United States or any of the Excluded Territories,
nor will the CREST stock account of Qualifying CREST Shareholders resident or
with registered addresses in the United States or any of the Excluded
Territories be credited.
The Company reserves the right to permit any Shareholder on the register at the
Record Date to take up his rights if the Company in its sole and absolute
discretion is satisfied that the transaction in question will not violate
applicable laws
Shareholders who have registered addresses outside the United Kingdom, or who
are citizens or residents of or located in countries other than the United
Kingdom, should carefully consider the information in paragraph 7 of Part X
(Terms and Conditions of the Rights Issue) of the Prospectus, when published.
11. Expected timetable - principal events(1)(2)
Announcement of the revised terms of the Acquisition and the Rights 11 September 2018
Issue..............................................................
Publication of the Circular and the Prospectus..................... 11 September 2018
Record date for entitlements under the Rights Issue............ 6.00 p.m. on 1 October 2018
General 10.00 a.m. on 3 October 2018
Meeting.................................................................
Admission and dealings in New Ordinary Shares, nil paid, commence 8.00 a.m. on 4 October 2018
trading on the London Stock Exchange...........
Latest time and date for acceptance and payment in full for the New 11.00 a.m. on 18 October 2018
Ordinary Shares.................................................
Dealings in New Ordinary Shares, fully paid, commence on the London 8.00 a.m. on 19 October 2018
Stock Exchange.............................................
Date of 1. October 2018
Completion.............................................................
1. The times and dates set out in the expected timetable of principal events
above and mentioned throughout the Circular and the Prospectus, by
announcement through a Regulatory Information Service may be adjusted by
the Company, in which event details of the new dates will be notified to
the UKLA and to the London Stock Exchange and, where appropriate, to
Shareholders.
2. References to times in this announcement are to London time unless
otherwise stated.
12. Definitions
The following definitions shall apply in this announcement unless the
context requires otherwise:
"Acquisition" the proposed acquisition of the entire issued share capital of Mondo by the
Elementis Group
"Admission" the admission of the New Ordinary Shares, nil paid, to the premium listing
segment of the Official List and to trading on the London Stock Exchange's main
market for listed securities
"Amendment Agreement" the amendment agreement dated 11 September 2018 between the Seller, the
Purchaser and Elementis for the amendment to the terms of the Sale and Purchase
Agreement
"Circular" the circular expected to be published by Elementis on 11 September 2018,
containing the Notice of General Meeting
"Company" or Elementis plc, a company registered in England and Wales with registered number
"Elementis" 03299608
"Completion" Completion of the Acquisition
"CREST" the system of paperless settlement of trades in securities and the holding of
uncertificated securities operated by Euroclear in accordance with the
Uncertificated Securities Regulations 2001, as amended
"Earn-Out Adjusted the EBITDA thresholds for the Earn-Out Consideration, as defined in the Sale
EBITDA" and Purchase Agreement
"Earn-Out the earn-out consideration payable to the Seller in accordance with the terms
Consideration" of the Sale and Purchase Agreement, subject to the achievement of certain
performance targets as set out in the Sale and Purchase Agreement
"Elementis Group" Elementis plc and its subsidiary undertakings (as defined in the Companies
Act), from time to time
"Equity Bridge" a term loan for $230 million made available to the Borrower pursuant to the
Equity Bridge Agreement
"Equity Bridge an equity bridge facility agreement dated 11 September 2018 between Elementis
Agreement" Holdings Limited as original borrower and original guarantor and Elementis,
Elementis UK Limited, Elementis Chromium Inc., Elementis Specialties, Inc.,
Elementis US Holdings Inc. and Elementis SRL, Inc. as original guarantors, and
HSBC Bank plc
"Enlarged Group" the Elementis Group plus the Mondo Group, following Completion or, if the
Acquisition does not complete, the Elementis Group (as the context requires)
"Euroclear" Euroclear UK & Ireland Limited, the operator of CREST
"Excluded Territories" Australia, Canada, New Zealand, Japan, South Africa and any other jurisdiction
where the extension or availability of the Rights Issue (and any other
transaction contemplated thereby) would breach any applicable law or regulation
"Existing Ordinary the Ordinary Shares in issue as at the date of this announcement
Shares"
"Facilities Agreement" a facilities agreement dated 11 September 2018 entered into between, amongst
others, Elementis Holdings Limited and Elementis US Holdings Inc. as original
borrowers and original guarantors, Elementis plc, Elementis UK Limited,
Elementis Chromium Inc., Elementis Specialties, Inc. and Elementis SRL, Inc. as
original guarantors, and Commerzbank Finance & Covered Bond S.A. as agent
"FSMA" the Financial Services and Markets Act 2000, as amended
"Fully Paid Rights" rights to acquire the New Ordinary Shares, fully paid
"General Meeting" the general meeting of the Company proposed to be held at The Montcalm Royal
London House, 22-25 Finsbury Square, London EC2A 1DX at 10.00 a.m. on 3 October
2018 to approve the Resolution, the notice of which is contained in the
Circular, or any adjournment thereof
"HSBC" HSBC Bank plc
"London Stock London Stock Exchange plc
Exchange"
"Mondo" Mondo Minerals Holding B.V.
"Mondo Group" Mondo and its subsidiary undertakings (as defined in the Companies Act), from
time to time
"New Ordinary Shares" the new Ordinary Shares to be issued by the Company pursuant to the Rights
Issue
"Nil Paid Rights" New Ordinary Shares in nil paid form provisionally allotted to Qualifying
Shareholders pursuant to the Rights Issue
"Notice of General the notice of a General Meeting of the Company appended to the Circular
Meeting"
"Overseas Shareholders who are resident in, ordinarily resident in, or citizens of,
Shareholders" jurisdictions outside the United Kingdom
"Provisional Allotment the provisional allotment letter to be issued to Qualifying Non-CREST
Letter" Shareholders
"Qualifying CREST Qualifying Shareholders holding Ordinary Shares on the register of members of
Shareholders" the Company on the Record Date which are in uncertified form
"Qualifying Non-CREST Qualifying Shareholders holding Ordinary Shares on the register of members of
Shareholders" the Company on the Record Date which are in certified form
"Qualifying holders of Ordinary Shares who are on the Company's register of members at the
Shareholders" Record Date
"Regulatory a regulatory information service that is approved by the FCA and that is on the
Information "Service" list of regulatory information services maintained by the FCA
"Resolution" the resolution to be proposed at the General Meeting in connection with the
Acquisition
"Revolving Facility" a $375 million multi-currency revolving credit facility made available under
the Facilities Agreement
"Rights" the Nil Paid Rights or the Fully Paid Rights (or both) as the context may
require
"Rights Issue" the offer by the Company by way of rights to Qualifying Shareholders to acquire
New Ordinary Shares
"Rights Issue Price" 152.0 pence per New Ordinary Share
or "Issue Price"
"Sale and Purchase the sale and purchase agreement dated 13 August 2018 between the Seller, the
Agreement" Purchaser and Elementis for the acquisition of the entire issued share capital
of Mondo as amended by the Amendment Agreement
"Securities Act" the US Securities Act of 1933
"Seller" Advent Mondo (Luxembourg) S.à r.l.
"Shareholders" holders of the Ordinary Shares from time to time
"Term Facility" a $400 million term loan facility (which is split into a $200 million US dollar
denominated tranche and a EUR172 million euro denominated tranche) made available
under the Facilities Agreement
"UBS" UBS Limited
"UK Listing Authority" the FCA when it is exercising its powers under Part 6 of FSMA
or "UKLA"
"Underwriters" UBS and HSBC
"Underwriting the underwriting and sponsor agreement dated 11 September 2018 between the
Agreement" Company and the Underwriters
"United Kingdom" or the United Kingdom of Great Britain and Northern Ireland
"UK"
"United States" or the United States of America, its territories and possessions, any state of the
"US" United States of America and the District of
Columbia
END
(END) Dow Jones Newswires
September 11, 2018 02:01 ET (06:01 GMT)
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