Grace Matthews. Overview of Capabilities & Market Update

Transcription

1 Grace Matthews Overview of Capabilities & Market Update

2 Grace Matthews Update Grace Matthews has successfully completed 23 chemicals transactions since the beginning of 2015 Summary Statistics Select Transactions 100% dedicated to chemicals & materials M&A 23 closed M&A transactions since 2015 has sold its subsidiary CiDRA Chemical Management, Inc. (CCMI) it has been recapitalized by has been recapitalized by has acquired has sold select Canadian assets to 16 completed sell-side transactions CiDRA Holdings, LLC MFG Chemical, Inc. Applied Adhesives Aakash Chemicals ICP Group Buckman Laboratories 7 completed buy-side transactions 15 transactions involving a strategic buyer has sold its global Polyolefin Catalysts business to has sold its pressurized polyurethane foam adhesives business to has sold its Baytown Operations to has sold its global automotive interior rigid thermoplastics coatings business to 9 carve-out transactions Henry Company BASF 3M Company TPC Group United Paint Ennis-Flint 4 cross-border transactions a division of has sold its portfolio company has acquired to has been recapitalized by Americhem Group CASS Polymers and Shoreview Industries California Products Corporation Jones-Blair Company W.F. Taylor Co. Compass Chemical International 2

3 Overview of Grace Matthews Grace Matthews focuses on providing the best options and alternatives for our clients 14 investment professionals focused entirely on the chemicals and materials value chain and have approximately 150 years of combined experience Strong continuity from low employee turnover More than 100 chemicals and materials transactions completed Proven track record in closing highly complex deals The majority of our transactions require us to navigate through issues such as legacy environmental matters, unions, pension liabilities, and FCPA/trade compliance Global access Grace Matthews has direct relationships with leading chemicals and materials companies and private equity firms Human capital Grace Matthews employs finance professionals with engineering, chemistry, and materials science degrees who have operations and business development experience Recognized as independent industry experts, with services including: Sell-Side 65% Transaction Breakdown Buy-Side 20% Recapitalizations / Other, 10% Fairness Opinions / Strategic Alternatives 5% Strategic vs. Financial Buyers 80% of GM sell-side clients were acquired by strategic buyers Business sales strategic and private equity Corporate divestitures Going-private transactions Acquisitions Capital raises Fairness opinions and valuations Recapitalizations and management buy-outs Strategic alternatives analysis Strategic 80% Private Equity 20% Deep Chemical Industry Expertise Across The Chemical Value Chain Petrochemical / Commodity Chemicals Inorganics, Ceramics & Catalysts Lubricants & Lube Additives Construction Materials Food Ingredients, Flavors & Fragrances Contract Packaging Adhesives, Sealants & Tapes Fine & Organic Chemicals Plastics, Polymers & Resins Oilfield & Water Treatment Chemicals Agricultural Chemicals Colorants & Additives Personal Care, Soaps & Cleaners Paint, Industrial Coatings & Inks 3

4 Industry Relationships Established Relationships with Industry Leaders GM principals have completed assignments with all below Direct ties to hundreds of other global and regional chemical companies Global Capabilities Nearly all of our sell-side processes include potential buyers from outside the U.S. We cultivate direct ties to senior management around the world, who respect us for our industry expertise and deal flow. They also often hire us for their divestitures GM principals visit European clients on a regular basis Approximately 70% of our deals in the last three years involved significant interaction with global, non-u.s. strategic buyers Approximately one-third of our deals in the last three years were crossborder 4

5 Select Chemical Value Chain Transactions has been recapitalized by MFG Chemical, Inc. Applied Adhesives 5

6 Grace Matthews Team John Beagle Co-founder, Managing Director Chemical Team Lead Former research engineer at Digital Equipment Corporation MBA from Cornell University, B.S. in Materials Science from Cornell University 25+ years relevant experience Ben Scharff Managing Director Advises clients in chemicals, paints and coatings, construction products and services, and general manufacturing sectors BS from University of Wisconsin-Madison and previously served in the United States Marine Corps 20+ years relevant experience Doug Mitman Co-founder, Managing Director Former Trader for Fidelity Investments and Market Maker at the American Stock Exchange in New York MBA from Cornell University and BA from Dartmouth College 25+ years relevant experience Andy Hinz Managing Director Former Equity Research Analyst at Robert W. Baird & Co. MBA from Northwestern University and BBA from University of Wisconsin-Eau Claire; holds the CFA designation 10+ years relevant experience Kevin Yttre Managing Director Formerly with ICI s Uniqema specialty chemicals business in U.S. and The Netherlands MBA from Harvard Business School, B.S. in Chemical Engineering from University of Wisconsin-Madison 10+ years relevant experience Thomas Osborne Senior Advisor Former CEO of both The Tnemec Company and ICI Paints North America / The Glidden Company BS from Youngstown State University, and has completed the Advanced Management Program at Harvard Business School 30+ years relevant experience Andrew Cardona Vice President Former Investment Associate at Prudential Capital Group, working in both the international group and the restructuring group BBA from the University of Wisconsin-Madison 8 years relevant experience Sarah Toledano Analyst Supports clients in a variety of chemical and materials industries BS in Chemistry from Massachusetts Institute of Technology (MIT) 3 years relevant experience Eric Sabelhaus Senior Associate Former Investment Banking Associate at Robert W. Baird and mechanical engineer at GE Energy MBA from the University of Chicago (Booth), MS and BS in Mechanical Engineering from Georgia Tech and Notre Dame, respectively 7 years of relevant experience Christopher Hayes Analyst Supports clients in a variety of chemical and materials industries BS in Mechanical Engineering from the University of Alabama Joined Grace Matthews in 2016 Jon Glapa Senior Associate Supports clients in colorants, coatings, adhesives, organic materials, and plastics industries MBA from the University of Chicago (Booth), BA in Mathematics with Secondary Field degree in Economics from Harvard University 5 years relevant experience Kevin Ngo Analyst Experienced in M&A, ESOPs, structured finance, debt and equity financing projects, and energy and commodity development markets BBA in Finance from the University of Oklahoma, with a minor in Chinese Joined Grace Matthews in 2017 Matthew Stouder Analyst Supports clients across the chemical and materials value chain MS in Finance and a BA in Chemistry (Magna cum Laude) from Texas A&M University. Joined Grace Matthews in 2017 Employee Highlights: 7 employees with STEM (Science, Technology, Engineering, Mathematics) degrees 7 personnel with MBAs from leading business programs 150+ years of combined relevant experience 100+ deals completed 6

7 Grace Matthews Chemicals Index 14.0x 12.0x Low: 5.2x February 2009 Current: 11.7x (all-time high) 10.0x 10Y Avg. Multiple: 9.5x 8.0x 6.0x 4.0x 2.0x 0.0x Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Note: The Grace Matthews Chemical Index is comprised of 98 publicly-traded chemical companies, spanning multiple markets, geographies, and company sizes. Public Trading EBITDA Multiples by Sector Since 2015, multiples have trended upwards across nearly all chemical sub-sectors that GM tracks Top sectors by value: F&F: 16.8x 20.0x 15.0x 10.0x 13.9x 13.9x 10.6x 8.9x 8.3x 13.7x 8.7x 16.8x Dec-15 Oct-16 Jan-17 Apr-17 Current 12.0x 12.4x 12.3x 11.8x 11.0x 10.4x 9.0x Agriculture: 13.9x 5.0x Adhesives: 13.9x Distribution: 13.7x 0.0x 7

8 M&A Drivers and Valuation Strong corporate balance sheets and ease of access to credit for buyers have created favorable market conditions. Strategic Buyers Strategic buyers are cash-rich and pushing acquisitive growth initiatives, keeping valuations elevated The credit markets are extremely aggressive, contributing to increased corporate access to debt capital Operating in an environment where organic growth is uncertain due to macro risk and low commodity prices Private Equity Debt and equity capital is readily available; driving LBO valuations higher At the end of Q2-2017, global dry powder reached a record high of $906 billion (1) High-quality companies are commanding very healthy premiums, but valuations remain driven by baseline prices derived from lending capabilities 8.0x 6.0x 4.0x 2.0x 0.0x 4.5x Median Historical Debt / EBITDA Multiples (2) 5.2x 4.5x 5.4x 5.2x 5.7x 5.4x (H1) 1. Preqin, Q Private Equity update. 2. Pitchbook, U.S. private equity breakdown. Data includes private equity and strategic buyer transactions. 5.9x Select Public Company from the GM Chemical Index Net Debt / TEV / TEV / Company EBITDA LTM Revenue LTM EBITDA 3M 1.0x 4.3x 15.3x Air Products 0.2x 3.3x 9.9x Akzo Nobel 0.9x 1.5x 9.8x Albemarle 1.0x 4.8x 16.8x Ashland 3.2x 1.2x 8.4x BASF 1.4x 1.5x 7.9x Clariant 2.0x 1.5x 10.2x Dow 1.7x 1.8x 9.8x Eastman 3.1x 2.1x 8.8x Ecolab 2.6x 3.4x 15.7x FMC Corp 2.4x 3.9x 18.4x HB Fuller 2.6x 1.5x 11.7x Innospec 1.4x 1.4x 10.2x Kemira 2.8x 1.0x 8.6x PolyOne 2.9x 1.2x 9.9x RPM 2.8x 1.7x 12.9x Sensient 2.4x 2.8x 15.1x Wacker Chemie 0.7x 1.1x 5.8x W.R. Grace 3.9x 3.7x 15.4x Summary Statistics Mean 2.0x 2.3x 11.6x Median 2.4x 1.7x 10.2x High 3.9x 4.8x 18.4x Low 0.2x 1.0x 5.8x 8

9 833 East Michigan Street, Suite 1420 Milwaukee, WI Grace Matthews, Inc. All rights reserved. Securities are offered through GM Securities, LLC, under common control with Grace Matthews, Inc., and a registered broker dealer and member of the Financial Industry Regulatory Authority.