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 €45.7 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 £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 €122.2 million and adjusted EBITDA of €31.1
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 €71.2 million for the six months ended 30 June 2018 from €60.6 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 €45.7
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 (£176.4
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 €71.2 million and
operating profit of €9.7 million. For the year ended 31 December 2017, the Mondo Group had revenue of
€122.0 million and operating profit of €15.4 million. Gross assets
of the Mondo Group as at 31 December
2017 were €341.4 million.
Key strengths of the Mondo Group include:
-
A leading global supplier of premium talc-based product
-
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
-
Continuous focus on innovation fuelling growth with a solid
pipeline of new projects
-
Track-record of stable adjusted EBITDA and cash generation
through economic cycles
-
High quality resource base with long life of mine and strategic
locations
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 (£176.4 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 €10-11
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 €45.7 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
($m)...................... |
0.0 |
5.0 |
10.0 |
15.0 |
20.0 |
25.0 |
% increase vs. 2017 adjusted
EBITDA...... |
41% |
44% |
47% |
49% |
52% |
55% |
|
2020
Earn-Out Adjusted EBITDA ($m) |
|
58.0 |
59.0 |
60.0 |
61.0 |
62.0 |
63.0 |
Earn-out Consideration
($m)...................... |
0.0 |
5.0 |
10.0 |
15.0 |
20.0 |
25.0 |
% increase vs. 2017 adjusted
EBITDA...... |
61% |
63% |
66% |
69% |
72% |
74% |
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 (£176.4 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
Issue.............................................................. |
11 September 2018 |
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
Meeting................................................................. |
10.00 a.m. on 3
October 2018 |
Admission and dealings in New
Ordinary Shares, nil paid, commence trading on the London Stock
Exchange........... |
8.00 a.m. on 4 October
2018 |
Latest time and date for acceptance
and payment in full for the New Ordinary
Shares................................................. |
11.00 a.m. on 18
October 2018 |
Dealings in New Ordinary Shares,
fully paid, commence on the London Stock
Exchange............................................. |
8.00 a.m. on 19
October 2018 |
Date of
Completion............................................................. |
- October 2018
|
-
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.
-
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" |
Elementis plc, a company registered
in England and Wales with registered number 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
EBITDA" |
the EBITDA thresholds for the
Earn-Out Consideration, as defined in the Sale and Purchase
Agreement |
"Earn-Out Consideration" |
the earn-out consideration payable
to the Seller in accordance with the terms 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
Agreement" |
an equity bridge facility agreement
dated 11 September 2018 between Elementis 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
Shares" |
the Ordinary Shares in issue as at
the date of this announcement |
"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 Exchange" |
London Stock Exchange plc |
"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
Meeting" |
the notice of a General Meeting of
the Company appended to the Circular |
"Overseas Shareholders" |
Shareholders who are resident in,
ordinarily resident in, or citizens of, jurisdictions outside the
United Kingdom |
"Provisional Allotment
Letter" |
the provisional allotment letter to
be issued to Qualifying Non-CREST Shareholders |
"Qualifying CREST
Shareholders" |
Qualifying Shareholders holding
Ordinary Shares on the register of members of the Company on the
Record Date which are in uncertified form |
"Qualifying Non-CREST
Shareholders" |
Qualifying Shareholders holding
Ordinary Shares on the register of members of the Company on the
Record Date which are in certified form |
"Qualifying
Shareholders" |
holders of Ordinary Shares who are
on the Company’s register of members at the Record Date |
"Regulatory Information
"Service" |
a regulatory information service
that is approved by the FCA and that is on the 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" or
"Issue Price" |
152.0 pence per New Ordinary
Share |
"Sale and Purchase
Agreement" |
the sale and purchase agreement
dated 13 August 2018 between the Seller, the 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 €172 million euro denominated tranche) made available under
the Facilities Agreement |
"UBS" |
UBS Limited |
"UK Listing Authority" or
"UKLA" |
the FCA when it is exercising its
powers under Part 6 of FSMA |
"Underwriters" |
UBS and HSBC |
"Underwriting Agreement" |
the underwriting and sponsor
agreement dated 11 September 2018 between the Company and the
Underwriters |
"United Kingdom" or
"UK" |
the United Kingdom of Great Britain
and Northern Ireland |
"United States" or "US" |
the United States of America, its
territories and possessions, any state of the United States of
America and the District of
Columbia |