Slide 1: Ingevity Announces Agreement to Acquire Perstorp's Capa Caprolactone Division
Ingevity Announces Agreement to Acquire Perstorp’s Capa TM Caprolactone Division December 10, 2018
Slide 2: Disclaimer
Disclaimer This presentation contains “forward - looking statements” within the meaning of the Private Securities Litigation Reform Act of 19 95. Such forward looking statements generally include the words “may,” “could,” “should,” “believes,” “plans,” “intends,” “targets,” “will,” “ exp ects,” “sug
Slide 3: Transaction Overview
Transaction Overview Transaction Value ▪ Cash purchase price of €590 million (~$675 million 1 ) ▪ ~11x 2018E adjusted EBITDA 2 ▪ Assumes no synergies or tax benefits ▪ Expected EPS accretive in year one ▪ To be financed under existing credit facilities and cash ▪ Pro forma 2018E net leverage: ~3.5x
Slide 4: Capa Caprolactone Business Overview
Capa TM Caprolactone Business Overview 4 ▪ Capa holds the #1 market position in caprolactone technologies, with only two other major competitors worldwide ▪ Caprolactone is a critical input to many high - growth end - use applications ▪ Note: Caprolactone is not caprolactam ▪ Highly profitable and s
Slide 5: Market Use Benefits End-Products
Market Use Benefits End - Products Coatings Capa Polycaprolactones for High - Performance Polyurethane Coatings • High gloss • Weathering resistance • Flexibility • Toughness • Self - healing • Aerospace coatings • Automotive coatings • Specialty flooring coatings • Windmill coatings Resins Capa - b
Slide 6: Value-creating Acquisition Consistent with Our Strategy
Value - creating Acquisition Consistent with Our Strategy Strategic Rationale ▪ Strong, m arket - leading business focused on high - growth end - use applications ▪ Complementary fit with Ingevity business model and capabilities ▪ Technology - focused relationships drive customer intimacy ▪ Similar
Slide 7: Strong, Market-leading Business Focused on High-growth End-use Applications
Strong, Market - leading Business Focused on High - growth End - use Applications 125 Projected Market Growth and Share by Product Segment Monomer Polyols Thermoplastic 46% ▪ Polyols synthesis ▪ Reactive modifier ▪ Coating additives ~4 – 5% ~6 – 7% ~4 – 5% 38% ▪ Coatings ▪ Elastomers ▪ Adhesives ~7%
Slide 8: Technology-focused Relationships Drive Customer Intimacy
Technology - focused Relationships Drive Customer Intimacy 8 Resins & Coatings 31% Adhesives 8% Elastomers 27% Bioplastics 5% Caprolactone and Other 29% Ingevity overlap Revenue by End - use Applications (2018E) Source: Company information ▪ Deep customer knowledge backed by 40 years of technical ex
Slide 9: Similar Manufacturing Process and Approach
Similar Manufacturing Process and Approach “ Capa ” Cyclohexanone Caprolactone Thermoplastics Adhesives Bioplastics Shoe Counters Medical Devices Caprolactone Polyols Adhesives Coatings Elastomers Hydrogen Peroxide Hexanediol (HDO) Caprolactone Lactides Coatings Elastomers Compound
Slide 10: Provides New Avenues for Strategic Growth and Value Creation
Provides New Avenues for Strategic Growth and Value Creation 10 ▪ Continued growth supported by end - market macro trends in core and emerging applications ▪ Biodegradable polymers, medical devices, 3D printing, etc. ▪ Untapped potential for caprolactone to increase penetration via technology substi
Slide 11: Top-tier Financial Profile, Immediately Accretive
Top - tier Financial Profile, Immediately Accretive 11 2013A 2018E Revenue Growth (2013A – 2018E) ▪ Compelling financial profile: ▪ Strong historical growth ▪ Sustainable adj. EBITDA margins in mid - 30%s ▪ Modest capital intensity ▪ Improves Performance Chemical segment adj. EBITDA margins by ~300b
Slide 12: Value-creating Acquisition Consistent with Our Strategy
Value - creating Acquisition Consistent with Our Strategy ▪ Furthers our purpose of purifying, protecting and enhancing the world around us ▪ Provides a complementary, growth platform in new and existing end - use applications ▪ Business aligned with Ingevity strengths: ▪ Technology - based customer