Olin Corporation · NYSE:OLN
Olin — Merger or Acquisition (September 2015)
16 slides from Olin's merger presentation, Sep 28, 2015
Slide 1: Olin & DCP Merger Update
Olin & DCPMerger UpdateSeptember 28, 2015
Slide 2: Forward-Looking Statements
Forward-Looking Statements This communication includes forward-looking statements. These statements relate to analyses and other information that are based on management’s beliefs, certain assumptions made by management, forecasts of future results, and current expectations, estimates and projection
Slide 3: SEC Disclosure Rules Important Notices and Additional Information
SEC Disclosure Rules Important Notices and Additional InformationIn connection with the proposed combination of Olin with the chlorine products business of The Dow Chemical Company (“TDCC”), Blue Cube Spinco Inc. (“Splitco”) has filed with the Securities and Exchange Commission (the “SEC”), and the
Slide 4: Dow – Olin Transaction Closing Timetable
Dow – Olin Transaction Closing TimetableDeal is on track to close no later than October 5, 2015 4 Completed Expected onOctober 5th Completed Completed Completed Completed Completed Completed
Slide 5: 'New Olin' EBITDA
‘New Olin’ EBITDA 5 Pro forma 2014 EBITDA bridge Costs Retained by Dow New Contract Terms & Services As Dow AnticipatedSynergies $6183 $2351 $ in millions 1 Based on audited financials as published in S4 filing2 Estimated annual cost savings as published in S4 filing3 Separated basis Existing Olin $
Slide 6: Ethylene Summary
Ethylene Summary Olin has access to cost-based ethylene for 100% of its acquired vinyls capacityOlin receives immediate ethylene integration without start up or operating risk 6
Slide 7: Stable Cash Flow From Product Diversity
Stable Cash Flow From Product Diversity Long-term contracts with Dow provide stable cash flowsWinchester provides stable and predictable cash flowsIndustrial bleach provides non-cyclical cash flowsChlorinated Organics uses by-product streams to serve non-cyclical demandOlin exposure to merchant chlo
Slide 8: Exposure to Olin Merchant Chlorine and Caustic
Exposure to Olin Merchant Chlorine and Caustic 8 Current Olin New Olin <20% 40% Total Revenue Merchant Chlorine and Caustic Soda Revenue not Exposed to Merchant Pricing >80% 60% $2 billion $7 billion
Slide 9: Significant Upside From Synergies
9 Significant Upside From SynergiesDetailed planning continues; expect to realize savings by end of third year 9 Cost synergies breakdown Expected Annual Value Logistics & procurement Increased procurement efficienciesElimination of duplicate terminals and optimization of freight to terminalsReducti
Slide 10: Synergy Update
Synergy Update Highly confident of achieving at least $200 million of annual cost synergiesFirst joint Olin-DCP synergy meeting held week of September 20 identified additional synergy upsideLogistics synergies available for realization DAY ONEEstimated access to new segments and customer synergies o
Slide 11: Balance Sheet Considerations
Balance Sheet Considerations Debt ProfileEfficient Transaction StructurePro Forma Free Cash FlowUses of Cash 11
Slide 12: Debt Profile
Debt Profile$ in millions Current Olin Notes $ 367Current Olin Recovery Zone Bonds 153New Term Loans 2,150New Bonds 1,220 Gross Debt $ 3,890Pro Forma weighted average interest rate is less than 5%All term loans are pre-payable without penaltyNear term debt maturities are $160 in 2016 and $38 in 2017
Slide 13: Efficient Transaction Structure
Efficient Transaction Structure Transaction is a clean “Our watch – your watch” allocation for legacy environmental and litigation liabilitiesOlin agreed to assume up to $400 million of domestic defined benefit pension liabilityFor funding purposes Olin domestic defined benefit pension plan is overf
Slide 14: Strong Pro Forma Free Cash Flow
Strong Pro Forma Free Cash Flow $ in millions 14 pro formaAdjustedEBITDA pro formaCash Flow pro formaInterest Dividend pro formaFreeCash Flow pro formaTaxes CapitalSpending $962 $280 $599 ($250) ($113) ($133) ($186) 1 2 3 4 5 Source: Dow, DCP Management, Olin Management(1) Company Adjusted EBITDA fo
Slide 15: Uses of Cash
Uses of Cash Annual maintenance capital spending estimated at $250 millionAnnual dividend $133 millionFree Cash flow focus on:Funding of synergy capital - $200 million over three yearsRepayment of debt 15
Slide 16: Summary of Bond Offering
Summary of Bond Offering Bonds are required to be issued to Dow to complete the tax free bond exchangeTo qualify for tax free treatment, bonds required a minimum term of 8 years with a 5 year non-call featureTotal issuance:$720 million of 8 year notes, 100% par value at 9.75%$500 million of 10 year