KMG Chemicals — Merger or Acquisition (August 2018)
15 slides from KMG Chemicals's merger presentation, Aug 15, 2018
Slide 1: Forward Looking Statements
FORWARD LOOKING STATEMENTS This investor presentation contains forward-looking statements, which address a variety of subjects including, for example, the expected timetable for closing of the proposed transaction between Cabot Microelectronics and KMG, the expected benefits and synergies of the pro
Slide 2: Cabot Microelectronics' Acquisition of KMG
Cabot Microelectronics’ Acquisition of KMG Highly attractive transaction that combines two industry leading electronic materials businesses • Cabot Microelectronics (Nasdaq: CCMP) to acquire KMG Chemicals (NYSE: KMG) • Total transaction value of $1.6B, inclusive of KMG’s net debt • Enhances CMC’s wo
Slide 3: Transaction Details
Transaction Details Attractive and compelling transaction for stakeholders • • • • 70% cash and 30% stock consideration Cash of $55.65 per KMG common share 0.2000 shares of Cabot Microelectronics stock For an aggregate consideration of $79.50 based on the volume weighted 20-day average closing price
Slide 4: Strategic Benefits
Strategic Benefits Acquisition of KMG aligns with Cabot Microelectronics’ stated M&A strategy Growing our core business – acquiring industry leading electronic materials consumables business Leverages existing channels to market and extends offering to customer base Financially compatible target wit
Slide 5: Attractive Synergy Opportunities
Attractive Synergy Opportunities Significant initial synergy estimate with potential incremental upside through strategic benefits Duplicative Public Company Costs ~50% $25 million Run-Rate Cost Synergies within Back Office and Support Functions ~30% 2 Years Other General and Administrative Costs ~2
Slide 6: Creating a Powerful Combination
Creating a Powerful Combination Combined company creates value and strengthens earnings with approximately $1B in annual revenue and approximately $320M of EBITDA + Revenues $570M * $460M ** $1,030M $3.1B $1.0B - Equity Capitalization EBITDA $175M * $119M ** $319M*** EBITDA Margin 31% 31%*** 26% Emp
Slide 7: Overview of KMG
Overview of KMG A global provider of electronic chemicals and performance materials and market leader across all of its business lines FY2018E Revenue by Segment* • Headquartered in Fort Worth, Texas with facilities in North America, Europe and Asia • 19 sites across the globe and 750 full-time empl
Slide 8: Expanding Electronic Materials Offering to Semi Customers
Expanding Electronic Materials Offering to Semi Customers KMG’s electronic materials business complements and expands Cabot Microelectronics’ existing portfolio • Transaction is synergistic with Cabot Microelectronics’ existing product offering • Combination enables additional touchpoints and insigh
Slide 9: Combined Portfolio of Critical Materials
Combined Portfolio of Critical Materials Provides essential products that constitute a minimal portion of the overall end product cost Electronic Materials Performance Materials KMG Electronic Chemicals Pipeline Performance Other CMC IC Consumables ~6%* of Revenues ~12%* of Revenues ~82%* of Revenue
Slide 10: Expands Global Footprint and Product Diversity
Expands Global Footprint and Product Diversity complementing Cabot Microelectronics' already strong Asia presence • •• .•.•. ' • • • • * Cabot Microelectronics Headquarters • Cabot Microelectronics Facilities • KMG Chemicals Facilities c=ff _Cabot -ff Microelectronics 11 ©2018 Cabot Microelectronics
Slide 11: Strengthening our Leading Position in the Industry
Strengthening our Leading Position in the Industry Combination of the two companies creates a platform of similar size and scale to Cabot Microelectronics’ primary peers + $ 1,446M $ 1,924M1 7% America 34% 21% 27% *Free Cash Flow Conversion = (EBITDA – CapEx)/EBITDA 1Pro forma for sale of Arysta Asi
Slide 12: Cabot Microelectronics' Capital Deployment Program
Cabot Microelectronics’ Capital Deployment Program Transaction has positive impact on our financial profile and will support additional capital return over time CMC Priorities: Current Status: • Continue to invest internally to maintain strong quality and technology leadership Internal Investments D
Slide 13: Stronger Together – Providing Solutions
Stronger Together – Providing Solutions • Strategic combination expands CMC’s world-class electronic materials business with increased scale, product depth and geographic diversity • Semiconductor focused and adds opportunities in high growth industries to provide materials critical to customers’ pr
Slide 14: For additional information, please contact
For additional information, please contact: investor_relations@cabotcmp.com 630.499.2600 ©2018 Cabot Microelectronics Corporation
Slide 15: For additional information, please contact
Sf Beet ectronics For additional information, please contact: investor_relations@cabotemp.com & 630.499.2600