Ashland Inc. · NYSE:ASH
Ashland — Ashland Global Holdings — Merger or Acquisition (April 2017)
12 slides from Ashland's merger presentation, Apr 17, 2017
Slide 1: Ashland Announces Agreement to Acquire Pharmachem Laboratories, Inc.
Ashland Global Holdings Inc. Announces Agreement to Acquire Pharmachem Laboratories, Inc. April 17, 2017
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Ashland has identified some of these forward-looking statements with words
Slide 3: Transaction Overview
Transaction Overview − Purchase price of $660 million − Transaction to be funded with bank financing and available cash − Transaction multiple of ~10.5x Pharmachem’s estimated fiscal 2017 adjusted EBITDA; ~7.5x after adjusting for expected cost synergies and tax optimization − Expected to be accreti
Slide 4: Pharmachem Overview
Pharmachem Overview Overview Revenue By End Market − Revenue of ~$300 million and adjusted Custom Manufacturing EBITDA margin of ~20% Food, Beverage 9% & Personal − Privately held; majority family owned Care 15% Nutrition 43% & Health − Leading international provider of (i) customized solutions and
Slide 5: Strategic Rationale
Strategic Rationale Strengthens our existing business with advanced processing know-how and formulation expertise Leverages our customization capabilities into niches where we create value − High customer-intimacy sales model emphasizing custom / tailored products − Creates unique industry offerin
Slide 6: Synergies
Synergies − Expected annual cost synergies of ~$10 million, primarily driven by leverage from Ashland’s scale and infrastructure, de-tolling opportunities and in-sourcing initiatives − Cost synergies expected to be realized by end of second year following transaction close − Incremental tax synergie
Slide 7: Financial Impact
Financial Impact − Expected to be accretive to EPS in first year following close of the transaction and to enhance long-term EPS growth − Strong cash flow generation − Attractive double-digit returns − Accretive to EBITDA margins − Financed primarily with bank financing with remainder from cash on h
Slide 8: Pro Forma Combination
Pro Forma Combination Pro Forma (Post-Valvoline Separation) Pharmachem (Post-Valvoline Separation) Revenue $3.0 bn(1) $0.3 bn $3.3 bn LTM as of December 31, 2016 Ashland Ashland Performance Custom Performance Pharmachem Food, Manufacturing Materials Materials Composites Beverage Nutrition Composites
Slide 9: Summary
Summary Acquisition of Pharmachem strategically and financially compelling Acquisition of Pharmachem strengthens our existing business with advanced processing know-how and formulation expertise Enhances Ashland’s position in the high growth nutraceutical end markets and opens up a new market op
Slide 10: Near-Term Calendar
Near-Term Calendar − Ashland plans to report financial results for Q2 FY 2017 after the NYSE closes on April 25 and to host a webcast with investors the following morning on April 26 − Ashland Investor Day scheduled for May 1 in New York City − The full separation of Valvoline remains on track − Sub
Slide 11: Ashland: always solving
i Ashland always solving
Slide 12: Reconciliation of Non-GAAP Data
Ashland Global Holdings Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data for 12 Months Ended December 31, 2016 ($ millions, except percentages) Sales 1 Q1 17 Q4 16 Q3 16 Q2 16 Total Specialty Ingredients 482 532 552 529 2,095 Performance Materials 222 222 238 239 921 ValvolineAshla
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