Olin Corporation · NYSE:OLN
Olin — Merger or Acquisition (March 2015)
18 slides from Olin's merger presentation, Mar 27, 2015
Slide 1: Combination of Dow Chlorine Products with Olin
Combination of The Dow Chemical Company’s “Dow Chlorine Products” with Olin March 27, 2015 Dow Andrew N. Liveris Chairman and Chief Executive Officer Olin Joseph D. Rupp Chairman and Chief Executive Officer 1
Slide 2: SEC Disclosure Rules
SEC Disclosure Rules Some of our comments today include statements about our expectations for the future. Those expectations involve risks and uncertainties. The parties cannot guarantee the accuracy of any forecasts or estimates, and we do not plan to update any forward-looking statements if our ex
Slide 3: Important Notices and Additional Information
SEC Disclosure Rules Important Notices and Additional Information In connection with the proposed transaction, Blue Cube Spinco Inc. (“Spinco”) will file a registration statement on Form S-4/S-1 containing a prospectus and Olin Corporation will file a proxy statement on Schedule 14A and a registrati
Slide 4: Agenda
Agenda Transaction Overview Strategic Alignment Details of “New Olin” 4
Slide 5: Strategic Benefits of Transaction
Strategic Benefits of Transaction Creates ~$7B revenue industry leader in Chlor-Alkali and derivatives Highly complementary to strategic objectives of both companies, which significantly enhances shareholder and customer value Highly value-creating to Dow shareholders as promised in December 2013 an
Slide 6: Dow's Portfolio Evolution
Dow’s Portfolio Evolution Steady Drumbeat of Actions Announced Plans to Restructure Costs and Shut Down Assets Divestiture Actions Begin Sale of PPL&C Announced Chlorine Carve-Out Exceeded $500MM Cost Savings $450MM Rail Car Sale Expanded Divestiture Target to $7B – $8.5B Sold Angus, SBH Dow Chlorin
Slide 7: Significant Value Creation for All Shareholders
Significant Value Creation for All Shareholders Transaction Overview Formation of ~$7B revenue Chlor-Alkali and derivatives leader Transaction based on $5B RMT structure for Dow Chlorine Products (DCP) at 8x multiple “New Olin” to benefit from a minimum of $200MM of operational synergies Strong, lon
Slide 8: Complementary Profiles
Complementary Profiles Dow Buyer Chlor-Alkali History 118 yrs 123 yrs Recent Chlorine Strategy Rationalizing Growing Global Chlor-Alkali Capacity* Top 10 Top 10 Asset Locations Global Regional US & Canada Downstream Applications 18 3 Cultural Fit Envelope Expertise Experience at Shared Sites Strong
Slide 9: Transaction Overview
Transaction Overview Structure and Considerations Reverse Morris Trust structure – split-off intention Total value of $5B at 8x multiple, consisting of ~$2.2B in common stock, ~$2.0B in cash and cash equivalents, ~$0.8B in assumed debt and pension liabilities Separate agreement on ethylene is additi
Slide 10: Olin Merger of Dow Chlorine Products Business with Olin Corporation
Olin Merger of Dow Chlorine Products Business with Olin Corporation March 26, 2015 10
Slide 11: Diversifies Olin's Business Mix
Diversifies Olin’s Business Mix 2014 pro forma EBITDA by business ($bn) Dow Chlorine Products Epoxy 12% Global Chlorinated Organics 18% 0% Chlor Alkali & Vinyl 70% ~$0.64bn Olin Winchester 37% Chemical Distribution 4% 0% Chlor Alkali 59% $0.34bn Pro forma NewCo Winchester 14% Global Chlorinated Orga
Slide 12: Creates a Leader in Chlorine-Based Products
Creates a Leader in Chlorine-Based Products Top chlorine producers worldwide (kMT) Chlorine global capacity: ~90,000 kMT 5,647 Olin + DCP1 3,730 DCP1 3,430 OXY 2,363 Formosa Plastics 2,249 Dow Post-separation2 2,249 Axiall 1,917 Olin 1,886 Solvay 1,719 Bayer Source: CMAI 2014 average capacities in k
Slide 13: Significant Cost Synergies with Strategic Opportunities Upside
Significant Cost Synergies with Strategic Opportunities Upside Synergies breakdown Expected value Logistics & procurement Increased procurement efficiencies Elimination of duplicate terminals and optimization of freight to terminals Reduction of net acquisition cost for purchased caustic Savings fro
Slide 14: Significant Cash Flow to Drive De-Leveraging
Significant Cash Flow to Drive De-Leveraging Total debt / Pro forma LTM EBITDA ($mm)1 2.0x Current Olin as of 12/31/14 ~ 3.0x Pro forma at signing ~ 2.5x Pro forma at signing + $200mm of run-rate synergies Commentary Olin has long track-record of prudent capital structure management Management remai
Slide 15: Summary of Dow Value Drivers
Summary of Dow Value Drivers Dow exceeds its divestment target of $7B-$8.5B Continued execution of ongoing strategic objectives to deliver increasing returns through a narrower, more targeted portfolio of market-aligned businesses Enables Dow to maintain physical integration for all of our key downs
Slide 16: Appendix
Appendix 16
Slide 17: Pro Forma Global Operating Footprint
Pro Forma Global Operating Footprint Zhangjiagang, China CER Gumi, South Korea CER Guaruja, Sao Paulo, Brazil LER, CER Pisticci, Italy CER Roberta, GA CER Rheinmünster, Germany CER Terneuzen, Netherlands Cumene Baltringen, Germany CER Stade, Germany CMP, Perc, Tric Epi/Allyl, LER, CER, BisA Freeport
Slide 18: RMT Transaction Value Overview
RMT Transaction Value Overview Units = $ Billions RMT Value Consideration in Debt/Cash $2.0 Assumptions of Pension and Debt $0.8 Subtotal Cash/Debt/Pensions $2.8 Consideration in stock* $2.2 Pre-Tax Consideration for DCP $5.0 2014 EBITDA Multiple 8x Separate agreement on ethylene is additive and hig