HOUSTON, Sept. 27, 2021 /PRNewswire/ -- Kraton
Corporation (NYSE: KRA) ("Kraton"), a leading global
sustainable producer of specialty polymers and high-value
bio-based products derived from pine wood pulping co-products,
today announced that it has entered into a definitive merger
agreement (the "Merger Agreement") pursuant to which DL Chemical
Co., Ltd. ("DL Chemical"), a subsidiary of DL Holdings Co., Ltd.
(formerly Daelim Industrial Co., Ltd.), will acquire 100% of Kraton
in an all-cash transaction implying an enterprise value of
approximately $2.5 billion. Under the
terms of the Merger Agreement, Kraton stockholders will receive
$46.50 in cash for each share of
Kraton common stock they own. As part of the transaction DL
Chemical has conveyed that they have fully committed financing.
"Following an extensive review of a wide-range of strategic
alternatives focused on maximizing value for the benefit of our
stockholders, Kraton's Board has determined that the sale of Kraton
to DL Chemical is in the best interest of Kraton stockholders. We
believe the transaction provides immediate and certain value for
Kraton stockholders, and represents an attractive premium of
approximately 50% over Kraton's unaffected market valuation as of
early July," said Kevin M. Fogarty,
Kraton's President and Chief Executive Officer. "Moreover, we
believe DL Chemical has the industry presence and resources to
continue to support the growth of Kraton's business on a global
scale".
"Consistent with our longstanding goal of maximizing value for
the benefit of our stockholders, over the years Kraton's Board and
management team have actively evaluated a wide range of strategic
alternatives. Today's announcement marks the culmination of
the strategic review process for Kraton, resulting in a transaction
that we believe provides significant value for Kraton
stockholders. In addition, we believe the scale and strength
of the combined company will also benefit our customers and our
employees, as it will expand Kraton's global reach while creating a
robust platform to further support investment in the existing
innovation pipeline and provide for further expansion of
sustainable offerings," said Dan F.
Smith, Chairman of Kraton's Board of Directors.
"DL Chemical has been conducting the petrochemical business
responsibly within the DL Group for 46 years. After acquiring
Kraton's Cariflex business last year, we have successfully
integrated that business within the DL Group," said Sang Woo Kim, Vice Chairman and Chief Executive
Officer of DL Chemical. "We also have been highly interested in
Kraton's specialty polymer and bio-based chemical business, and
this combination will allow us to provide our customers with a
wider range of innovative products, while adding the ability to
serve a diverse range of end markets in over 70 countries
worldwide."
The Merger Agreement was unanimously approved by Kraton's Board
of Directors, which has recommended that Kraton stockholders vote
in favor of the transaction. The acquisition is subject to certain
customary closing conditions, including the receipt of stockholder
and regulatory approvals, and is expected to close by the end of
the first half of 2022.
J.P. Morgan Securities LLC is acting as exclusive financial
advisor, and King & Spalding LLP is acting as legal
counsel to Kraton in connection with the transaction. Goldman
Sachs is acting as financial advisor, and O'Melveny & Myers LLP
is acting as legal counsel to DL Chemical in connection with the
transaction.
ABOUT KRATON
Kraton Corporation (NYSE "KRA") is a leading global
producer of specialty polymers and high-value performance products
derived from renewable resources. Kraton's polymers are
used in a wide range of applications, including adhesives,
coatings, consumer and personal care products, sealants and
lubricants, and medical, packaging, automotive, paving and roofing
products. As the largest global provider in the pine chemicals
industry, the company's pine-based specialty products are sold into
adhesive, road and construction and tire markets, and it produces
and sells a broad range of performance chemicals into markets that
include fuel additives, oilfield chemicals, coatings, metalworking
fluids and lubricants, inks and mining. Kraton offers its
products to a diverse customer base in over 70 countries
worldwide. Kraton, the Kraton logo and design are
all trademarks of Kraton or its subsidiaries or
affiliates.
ABOUT DL CHEMICAL
DL Chemical is a leading petrochemical company with more than 46
years of operational experience and unique technological know-how.
Based in Korea, the company was the first petrochemical firm in the
country to commercialize metallocene polyethylene and polybutene,
as well as the first to export polybutene technology to
the United States. DL Chemical is
the world's largest producer of polybutene with a production
capacity of 200 KTA year. DL Chemical has commercialized BOCD
(Broad Orthogonal Co-Monomer Distribution) polyethylene and EPO
(Ethylene-Propylene Oligomer) for only the second time worldwide.
In March 2020, DL Chemical (as a part
of Daelim Industrial Co., Ltd. prior to the split-off of DL
Chemical) acquired Kraton's CariflexTM business for
$530 million in cash.
FORWARD LOOKING STATEMENTS
Some of the statements and information in this press release
contain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. This press
release includes forward-looking statements that reflect the
Company's beliefs, expectations and current views with respect to,
among other things, its financial condition, financial performance
and other future events or circumstances. Forward-looking
statements are often identified by words such as "outlook,"
"believes," "target," "estimates," "approximately," "expects,"
"projects," "represents," "may," "intends," "plans," "on track,"
"anticipate," the negative of such words or similar terminology,
and include, but are not limited to, Kraton's expectations
with respect to the sale of Kraton, including the timing
thereof.
Examples of forward-looking statements in this news release
include, but are not limited to, statements about the price, terms
and closing date of the proposed transaction, and statements
regarding stockholder and regulatory approvals and the satisfaction
of various other conditions to the closing transaction contemplated
by the Merger Agreement. Forward-looking statements are subject to
certain risks and uncertainties that could cause actual results,
expectations, or outcomes to differ materially from our historical
experience as well as management's present expectations or
projections. These risks and uncertainties include, but are not
limited to: (i) the occurrence of any event, change or other
circumstances that could give rise to the termination of the Merger
Agreement; (ii) the inability to complete the proposed
transaction due to the failure to obtain Kraton stockholder
approval for the proposed transaction or the failure to satisfy
other conditions of the proposed transaction within the proposed
timeframe or at all (including receipt of regulatory approvals);
(iii) risks related to disruption of management's attention
from Kraton's ongoing business operations due to the transaction;
(iv) the outcome of any legal proceedings, regulatory
proceedings or enforcement matters that may be instituted against
Kraton and others relating to the Merger Agreement; (vi) the
risk that the pendency of the proposed transaction disrupts current
plans and operations and the potential difficulties in employee
retention as a result of the pendency of the proposed transaction;
(vii) the effect of the announcement of the proposed
transaction on Kraton's relationships with its customers,
suppliers, key stakeholders, employees, operating results and
business generally; (viii) risks related to Kraton's business or
stock price as a result of uncertainty surrounding the proposed
transaction; (ix) the amount of the costs, fees, expenses and
charges related to the proposed transaction; and (x) other risks to
consummation of the proposed transaction, including the risk that
the proposed transaction will not be consummated within the
expected time period or at all. Consider these factors carefully in
evaluating the forward-looking statements.
All forward-looking statements in this press release are made
based on management's current expectations and assumptions, which
are subject to known and unknown risks, uncertainties and other
important factors that could cause actual results to differ
materially from those expressed in forward-looking statements.
These risks and uncertainties are more fully described in the
Company's latest Annual Report on Form 10-K, including but not
limited to "Part I, Item 1A. Risk Factors" and "Part II, Item 7.
Management's Discussion and Analysis of Financial Condition and
Results of Operations" therein, and in the Company's other filings
with the Securities and Exchange Commission (the "SEC"),
and include, but are not limited to, risks related to: not
completing, or not completely realizing the anticipated benefits
from, the sale of the business; receipt and timing of necessary
regulatory approvals; Kraton's reliance on third parties
for the provision of significant operating and other services;
conditions in, and risk associated with operating in, the global
economy and capital markets; fluctuations in raw material costs;
natural disasters and weather conditions; limitations in the
availability of raw materials; and other factors of
which Kraton is currently unaware, deems immaterial or
are outside Kraton's control. In addition, to the extent
any inconsistency or conflict exists between the information
included in this press release and the information included in our
prior releases, reports or other filings with the SEC, the
information contained in this press release updates and supersede
such information. The Company believes its expectations and
assumptions are reasonable, but there can be no assurance that the
expectations reflected herein will be achieved. Accordingly,
readers are cautioned not to place undue reliance on
forward-looking statements. Forward-looking statements speak only
as of the date they are made, and the Company assumes no obligation
to update such information in light of new information or future
events.
Additional Information and Where to Find It
This communication may be deemed to be solicitation material in
respect of the proposed acquisition of Kraton by DL
Chemical. In connection with the proposed transaction, Kraton
intends to file relevant materials with the SEC, including Kraton's
proxy statement on Schedule 14A, related to the solicitation of
proxies for the Kraton stockholders' meeting with respect to the
proposed transaction. This press release does not constitute any
solicitation of votes or approval in relation to the proposed
transaction. BEFORE MAKING ANY VOTING DECISION,
STOCKHOLDERS OF KRATON ARE URGED TO READ ALL RELEVANT DOCUMENTS
FILED WITH THE SEC, INCLUDING KRATON'S PROXY STATEMENT AND
OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE
PROPOSED TRANSACTION, IN THEIR ENTIRETY WHEN SUCH DOCUMENTS BECOME
AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
THE PROPOSED TRANSACTION AND THE PARTIES
THERETO. Investors and security holders will be able to
obtain the documents (when available) free of charge at the SEC's
web site, www.sec.gov, and Kraton
stockholders will receive information at an appropriate time
on how to obtain transaction-related documents for free from Kraton
. Such documents are not currently available.
Participants in Solicitation
Kraton and its directors and executive officers may be deemed to
be participants in the solicitation of proxies from the holders of
Kraton common stock in respect of the proposed transaction.
Information about the directors and executive officers of Kraton is
set forth in its proxy statement for its 2021 Annual Meeting of
Stockholders, which was filed with the SEC on April 8, 2021. Investors may obtain additional
information regarding the interests of such persons in the proposed
transaction, by security holdings or otherwise, by reading the
definitive proxy statement regarding the acquisition when it
becomes available.
For additional information:
H. Gene Shiels 281 504-4886
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SOURCE Kraton Corporation