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Specialty Chemicals MonthlyFebruary 2013
Market Commentary
Fine Chemicals: Active Pharmaceutical Industry
The active pharmaceutical ingredient (API) industry is expected to experience near-term growth of 2 3% in vaterms and 4 5% in volume terms. The expected growth will be driven by an increase in demand for contramanufacturing, specifically in late-phase clinical development and commercialization. Due to the expected increase demand, several API manufacturers are looking to secure Western-based assets to meet the needs of emergbiopharmaceutical and large pharmaceutical clients in the U.S. and Europe. As a result, manufacturers have recenexpanded or are in the process of expanding capacity. These manufacturers include Cambridge Major LaboratoriAlbemarle and American Pacific. Additionally, Lonza recently established a joint venture in China to develop amanufacture generic pharmaceuticals and is planningto establisha jointventure in South Americato produce APIs.
Ethylene Market Update
Ethane-based ethylene margins, basedon contractprices, reached 31.22 cents/lb., as trackedbyICIS, which represethe highest level since 2000. The margin increase was primarily due to a nearly 50% decline in average U.S. ethaprices during 2012. Ethane prices continue to fall as newly abundant supplies of natural gas from share formatiobecome available. According to the U.S. National Intelligence Council (NIC), U.S. production of ethane has increas
by nearly 50% per year between 2007 and 2011. Ethylene profitability is expected to be similar in 2013as cheap liqnatural gas feedstock prices are expected to remain low. U.S. based ethylene producers are currently enjoying a macost advantage over other regions, specifically Europe and Asia, where ethylene production is predominately based naphtha, whichhas experiencedrising costs.
Mergers & Acquisitions and Capital Markets Update (see pg. 3-7)
On February13, PolyOnecompleteda $600million, 10-year seniorunsecurednotes offeringata 5.250%coupon to fua portion of its acquisition of Spartech, make a $50 million pension contribution and repay its senior secured termloKeyBanc Capital Markets acted as a Co-Manager on the offering
On February 12, Milacron agreed to acquire Mold-Masters, the Canadian-based manufacturer of advanced hot runnsystems, temperature controllers andauxiliaryequipmentfor theplastic industry, for$967million (3.6x 2012sales)
On J anuary 21, OM Group announced the sale of its cobalt refinery assets in Kokkola, Finland to a joint venture to
held byFreeport-McMoRan Copper & Gold, Lundin Mining Corporation, and La Generale des Carrieres etdes Mines $325million, plus thepotential for$110million inadditionalpayments over threeyears, basedonanearnout
Source: Company Filings, Press Releases, IHS Chemical Week, ICIS, Equity Research
Markets Update (see pg. 10)
The KeyBanc Capital Markets (KBCM) Specialty Chemicals Index has traded up year to date for the period endFebruary 20th, increasing 5.8% in the period, compared to a 6.0% increase in the S&P 500. The Chemical Index is 15.6% overthelast threemonthsvs. a 8.7%increase for theS&P 500
Disclosure: KeyBanc Capital Markets is a trade name underwhich corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc., MemberNYSE/FINRA/SIPC, and KeyBank National Association (KeyBank N.A.), are marketed. Securities products and services are offered by KeyBanc Capital Markets Inc. and its licensed securitiesepresentatives, who may also be employees of KeyBank N.A. Banking products and services are offered by KeyBank N.A. This report was not issued by our research department. The information
contained in this report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should notbe relied upon as such. This report does not purport to be acomplete analysis of anysecurity, issuer, or industry and is notan offer or a solicitation of an offer to buyor sell anysecurities. This reportis prepared forgeneral information purposes onlyand does
notconsiderthe specific investmentobjectives, financial situationandparticularneeds of anyindividual person or entity.
SPECIALTY CHEMICALS REVIEW
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Specialty Chemicals Monthly
P LA ST IC S H D P E LD P E
End of M onth P rice $0.64 $0.73
M oM % Change 5.8% 3.2%
YoY % Change (3.1%) 0.7%
P LA ST IC S P P P S P VC
End of M onth P rice $0.79 $1.04 $1.39
M oM % Change 11.7% 2.5% 0.0%
YoY % Change 14.5% 4.8% 69.5%
A R OM A T IC S B en ze ne T o lu en e St yr ene
End of M onth P rice $4.71 $4.46 $0.79
M oM % Change (2.1%) 5.9% 5.4%
YoY % Change 13.2% 12.6% 19.8%
OLEF IN S Et hylene P ro pylene B ut adiene
End of M onth P rice $0.62 $0.74 $0.83
M oM % Change (3.1%) 17.6% 17.0%
YoY % Change (7.5%) 8.9% (36.0%)
N A T . R E SO UR C E S P a l m O il N a t . R u bb er
End of M onth P rice $865 $1.43
M oM % Change 4.8% (7.6%)
YoY % Change (23.1%) (22.2%)
$0.4
$0.6
$0.8
$1.0
$1.2
$1.4
$1.6
J an-12 Apr-12 J ul-12 Oct-12 J an-13
US$
/bbl
PP (HoPP ) PS (HIP S) PVC
$0.4
$0.5
$0.6
$0.7
$0.8
$0.9
$1.0
J an-12 Apr-12 J ul-12 Oct-12 J an-13
US$
/bbl
HDP E (Inj. Mold Grade) LDPE (Film)
$0.3
$0.4
$0.5
$0.6
$0.7
$0.8
$0.9
$2.5
$3.0
$3.5
$4.0
$4.5
$5.0
$5.5
Feb-12 May-12 Aug-12 Nov-12 Feb-13
US$
/lb
US$
/gal
Benzene Toluene Styrene
$0.0
$0.5
$1.0
$1.5
$2.0
Feb-12 May-12 Aug-12 Nov-12 Feb-13
US$
/lb
Ethylene Butadiene Propylene
February 2013
RAW MATERIAL PRICE TRENDS (Through February 20, 2012)
Natural Resources
Petrochemicals (Gulf Coast)
Plastics[1]
Source: Bloomberg1] PVC pricing is for general purpose resins; P lastics pricing is through J anuary 1, 2012
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$40
$60
$80
$100
$120
$140
$160
Feb-12 May-12 Aug-12 Nov-12 Feb-13
US$/MMBtu
US$
/bbl
Crude Oil (WTI) Nat. Gas (Henry Hub)
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$400
$600
$800
$1,000
$1,200
$1,400
Feb-12 May-12 Aug-12 Nov-12 Feb-13
US$
/lb
US$
/bbl
Palm Oil (Rotterdam) Nat. Rubber (Singapore)
EN ER GY C rude Oi l Nat ural Gas
End o f Month P rice $94.46 $3.35
M oM % Change (1.2%) (5.1%)
YoY % Change (8.5%) 25.5%
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Specialty Chemicals MonthlyFebruary 2013
SELECT RECENT TRANSACTIONACTIVITY
Closed
(Announced)
Acquirer
(Parent)
Target
(Seller)Highlights
Pending
(2/14/2013)
RockwoodHoldings, Inc.
Sachtleben ChemieGmbH(Kemira Oyj)
Rockwood agreed to acquire Kemiras remaining 39% stake in Sachtleben Chemthe Germain-based producer of specialty titanium dioxide pigments for the synthfiber, packaging inks, cosmetics and food industries, for $131 million
As previously stated by Rockwood, the titanium dioxide is non-core and transaction allows Rockwood to explore and execute the best strategic option forbusiness
The divestment represents Kemiras focus on implementing its water strategy aalso supports Kemiras restructuring measures
Pending
(2/13/2013)
One Rock CapitalPartners LLC
SummitReheis, Inc.(MVC Capital, Inc.)
One Rock Capital Partners (One Rock) agreed to acquire SummitReheis, Huguenot, NY-based manufacturer of antiperspirant and deodorant active ingredie
Prior to the completion of the transaction, MVC Capital agreed to purchase SumCustom Spray Dying (SCSD), a provider of custom spray dying products to
food, pharmaceutical, and flavorand fragrance industries, fromSummitReheis
SCSD will operate as a stand-alone business following the closing of SummitReheis sale
Pending
(2/12/2013)
Milacron LLC Mold-MastersLimited(3i Group pl c)
Milacron agreed to acquire Mold-Masters, the Canadian-based designer manufacturer of advanced hot runner systems, temperature controllers and auxilequipment for the plastic industry, for $967 million (3.6x2012 sales)
The acquisition provides Milacron with expertise in the high-growth hot-runner maas well as expanded scale, technological leadership, international presence competitive positioning
Mold-Masters generated sales of approximately $268 millionin 2012
Pending
(2/4/2013)
Jab il Ci rcu it Inc . Nyp ro , Inc. J abil Circuit agreed to acquire Nypro, the Clinton, MA-based leader of manufactuprecision plastic consumables and disposables for the healthcare market, for $6
million(0.55x 2012 sales)
The transaction extends J abils materials manufacturing capabilities into healthcare and consumer packaging markets as well as adds depth to J aconsumer electronics business
Nypro generated sales of approximately$1.2 billion in 2012
1/31/2013
(1/31/2013)
Eurecat JointVenture(Albemarle, IFPInvestments)
Tricat Industries Eurecat, a J V between Albemarle and IFP Investments, acquired TricatIndustries
The transaction enhances Eurecats processing capabilities for catalyst regeneratrejuvenation, pre-reclaim burn off, sulfiding, pre-activation and catalyst or additivtoll manufacturing with the addition of two industrial sites located McAlester, Oand Bitterfeld, Germany
Eurecats market capabilities for specialty zeolites and additives will also strengthened with the Tricatacquisition
1/31/2013
(1/31/2013)
TonenGeneralSekiyu
Nippon Unicar JV(Union Carbides50% stake)
TonenGeneral Sekiyu acquired Union Carbides 50% stake in NipponUnicar (NUthe J apan-based polyethylene J V
The transaction will improve NUCs business capability, enabling NUC to respquicklytomarket needs with integrated operations
The J V generated sales of $367 million in 2011
Source: Company Filings, Press Releases, ChemWeek, Capital IQ, Bloomberg
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Specialty Chemicals MonthlyFebruary 2013
SELECT RECENT TRANSACTIONACTIVITY
Closed
(Announced)
Acquirer
(Parent)
Target
(Seller)Highlights
Pending
(1/22/2013)
InternationalForest ProductsLtd.
Wood ProductsBusiness (RayonierInc.)
International Forest Products (IFP) agreed to acquire the assets of RayoniWood Products business, which consists of three lumber mills located in BaxSwainsboro, and Eatonton, GA, for$80million
The transaction supports Rayoniers strategy to fully position its manufactuoperations in the specialty chemicals sector and represents IFPs first purchoutside the NorthwestU.S. and Canada
The three mills generated operating income of approximately$10 million in 2012
Pending
(1/21/2013)
Freeport-McMoRanCopper & GoldInc.; LundinMining
Corporation; LaGenerale desCarrieres et desMines
Cobalt ChemicalRefinery(OM Group, Inc.)
OM Group announced the sale of its cobalt refinery assets in Kokkola, Finland tjoint venture to be held by Freeport-McMoRan Copper & Gold, Lundin MinCorporation, and La Generale des Carrieres et des Mines for total consideration$435 million, of which $325 million is in cash andthe remaining $110 million is baon the business achievingcertain financial objectives over the next three years
The divestiture of the cobalt business is OM Groups final step in exiting its legacommodity business and is consistent with its strategy to move up the value chinto technology-based businesses with attractive growth prospects
Subsequent to close, OM Group expects to have total cash on hand of over $5million, which it expects to deploy to repay a substantial portion of its drepurchase up to $50 million of its shares, and support its strategy of profitaorganic and strategic growth
1/17/2013
(1/17/2013)
The EdgewaterFunds
Kenzoid CompanyLtd. and EldonWater Inc.
The Edgewater Funds (Edgewater) acquired Kenzoid Company and Eldon Wa(collectively Klenzoid), Toronto, Canada-based water treatment chemicals suppand services company
The acquisition is complementary to Edgewaters purchase of Nashville Chemica2011, which will allow both companies to service a broader geographic basecustomers while leveraging scale, procurement, and bestpractices
Edgewater is pursuing additional acquisitions in the following water industry sectwater treatment products, chemicals, services and pipeline infrastructure produand services
1/10/2013
(1/10/2013)
Amtech, LLC(BlackfordCapital)
ArrowheadComposites andThermoplastics,Inc.(Arrowhead PlasticEngineering, Inc.)
Amtech acquired Arrowhead Composites and Thermoplastics (ACT), the ElmAlabama-based fiber-reinforced plastic components manufacturing facilityservingtransportation, recreation, and utility industries
Arrowhead positions Amtech to meet the demand of Amtechs regional productcommitments and provide a newterritory forgrowth
Amtech plans to continue growing its business in the Pacific Northwest andseeking growth opportunities in the Midwest
1/9/2013
(1/9/2013)
Pilot ChemicalCompany
Mason ChemicalCompany
Pilot Chemical Companyacquired Mason Chemical Company, the Arlington HeigIllinois-based leader in the development, registration and sale of quaternammoniumcompounds and relatedchemistries
The acquisition enhances Pilot Chemicals household, industrial and institutiopersonal care and oil and gas product portfolio, strengthening its offering by addregistered and non-registered biocidal quats andtertiaryamine derivatives
Source: Company Filings, Press Releases, ChemWeek, Capital IQ, Bloomberg
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Specialty Chemicals MonthlyFebruary 2013
SELECT RECENT TRANSACTIONACTIVITY
Closed
(Announced)
Acquirer
(Parent)
Target
(Seller)Highlights
1/7/2013
(1/7/2013)
Innospec Inc. Strata ControlServices, Inc.
Innospec acquired Strata Control Services, the Crowley, Louisiana-based suppliemudandfluid loss solutions to oil andgas drillingoperations (~6.0x 2012 EBITDA)
The transaction provides Innospec an increased presence in the expanding oilfspecialties business
Strata Control Services generated sales of approximately$20 million in 2012
Pending
(12/27/2012)
SK CapitalPartners
Textile Chemicals,Paper Specialtiesand EmulsionsBusinesses(Clariant ChemicalsLtd.)
SK Capital Partners acquired the Textile Chemicals, Paper Specialties, aEmulsions businesses of Clariant Chemicals forapproximately $500 million
The acquisition is consistent with SK Capitals strategy of acquiring niche maleaders with strong brands, technologies and underlying growth trends as well aswith SK Capitals priorexperience in the textile, fiber and nylon chemicals sectors
The purchased businesses generate annual sales of approximately $1.3 billion aoperate from25 facilities aroundthe world
12/19/2012
(11/27/2012)
MidOceanPartners
Agi lex Flavo rs &Fragrances Inc.(Nautic Partners,LLC)
MidOcean Partners acquired Agilex Flavors & Fragrances, the P iscataway, NJ ersey-basedproviderof fragrance compounds and delivery systems sold primarilmanufactures of air care, personal care, industrial and institutional and househprodcuts
Agilex maintains production facilities in Georgia, New J ersey, and China along witfragrance laboratory located in Hong Kong
Source: Company Filings, Press Releases, ChemWeek, Capital IQ, Bloomberg
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Specialty Chemicals MonthlyFebruary 2013
Source: Company Filings, Press Releases, ChemWeek, Capital IQ, Bloomberg
SELECT RECENT CAPITAL MARKETSACTIVITY
Closed CompanyGross
Offering SizeHighlights
2/21/2013 Ash land Inc. $2.3 bi ll ionSenior Notes
Ashland, the Covington, KY-based specialty chemicals provider, completed a $2.3 billion, fopartoffering
The firstpart consisted of a $600 million,3-yearseniornotes offering ata 3.000% coupon
The second partconsisted of a $700 million, 5-yearseniornotes offering ata 3.875% coupon
The third partconsisted of a $650 million, 9-year seniornotes offering ata 4.750% coupon
The fourthpart consisted of a $350 million, 30-year seniornotes offering ata 6.875% coupon
The proceeds, along with $200 million of revolver borrowings and cash, will be used to pdown the issuers existing termloans
2/13/2013 PolyOneCorp.
$600 SeniorUnsecuredNotes
PolyOne, the Avon Lake, OH-based provider of specialized polymer materials, services asolutions, completed a $600 million, 10-year senior unsecured notes offering at a 5.25coupon
The proceeds will be used to fund a portion of its acquisition of Spartech, to make a $50 milpension contribution and to repayits senior securedtermloan
KeyBanc Capital Markets acted as a Co-Manager on the offering
2/13/2013 Praxair Inc. $900 millionSenior Notes
Praxair, the Danbury, CT-based distributorof process gases, completed a $900 million, two-offering
The firstpart consisted of a $400 million,3-yearseniornotes offering ata 0.750% coupon
The second partconsisted of a $500 million, 10-year seniornotes offering ata 2.700% coupo
The proceeds will be used for general corporate purposes, including acquisitions and shrepurchases
2/12/2013 Dupont $2 billionSenior Notes
Dupont, the Wilmington, DE-based science and technology based company, completed a billion, two-part offering
The first partconsisted ofa $1.25 billion, 10-year senior notes offering ata 2.800% coupon
The second partconsisted of a $750 million, 30-year seniornotes offering ata 4.150% coupo
The proceeds, in addition to proceeds fromthe divestiture of its coatings business, will be utopaydown the Companys outstanding commercial paper balances
2/11/2013 Airgas, Inc. $600 mi ll ionSenior Notes
Airgas, the Radnor, PA-based distributer of industrial, medical, and specialty gases, complea $600 million, two-part offering
The firstpart consisted of a $325 million,5-yearseniornotes offering ata 1.650% coupon
The second partconsisted of a $275 million, 7-yearseniornotes offering ata 2.375% coupon
The proceeds will be used for general corporate purposes including acquisitions and shrepurchases
1/30/2013 Air Products& Chemicals
Inc.
$400 milli onSenior Notes
Air Products , the Allentown, PA provider of industrial gases, completed a $400 million, 10-yseniornotes offeringata 2.750% coupon
The proceeds will be used forgeneral corporate purposes
1/29/2013 OrionEngineeredCarbonsGmbH
$425 milli onPIK Notes
Orion Engineered Carbons, the German-based manufacturer of carbon black products for tire and rubber industry, completed a $425 million, 6-year P IK notes offering at a 9.25coupon ata priceof 99, yielding 9.460%
The proceeds will be usedto fund a shareholder distribution, withexcess capital via the upsizsimplybolstering the payment
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Specialty Chemicals MonthlyFebruary 2013
Source: Company Filings, Press Releases, ChemWeek, Capital IQ, Bloomberg
SELECT RECENT CAPITAL MARKETSACTIVITY
Closed CompanyGross
Offering SizeHighlights
1/24/2013 Trinseo SA $1.325 billionSenior SecuredNotes
Trinseo, the Berwyn, PA-based manufacturer of specialty and customized emulsion polymand plastics, completed a $1.325 billion, 6-yearnotes offering ata 8.75% coupon
The proceeds will be used to pay down existing termdebt
1/17/2013 Axiall Corp . $688 mi ll ionSenior Notes
The Georgia Gulf / PPG Industries combined entity completed a $688 million, 8-year nooffering ata 4.625% coupon
The proceeds are expected to be used to finance the merger of Georgia Gulf and PPCommodityChemicals business
1/17/2013 Georgia GulfCorp
$450 milli onSeniorUnsecured
Notes
Georgia Gulf, the Atlanta, Georgia-based manufacturer of chemicals and building producompleted a $450 million, 10-year notes offering ata 4.875% coupon
The proceeds, along with cash on hand or revolving borrowings, are expected to be used
fund a tender offer for the companys 9% secured notes due 2017
1/16/2013 DuPontPerformanceCoatings
$750 milli onSenior Notes
DuPont Performance Coatings, the German-based manufacturer of surface coating producompleted a $750 million, two-part offering
The firstpart consisted of a $750 million,8-yearseniornotes offering ata 7.375% coupon
The second part consisted of a $322 million, 8-year senior secured notes offering at a 5.75coupon
The proceeds will be used to support Carlyle Groups $4.9 billion cash purchase of DuPonPerformance Coatings business
1/16/2013 TPC GroupInc.
$100 milli onSenior SecuredNotes
TPC Group, the Houston, Texas-based producer of value-added products derived fpetrochemical raw materials, complete a $100 million, 7-year senior secured notes offering a8.750% coupon
The proceeds will be used forgeneral corporate purposes, includingstrategic capital projects
1/16/2013 MomentiveSpecialtyChemicals
$1.1 billi onSenior SecuredNotes
Momentive Specialty Chemicals, the Columbus, OH-based manufacturer of specialty chemiand materials, completed a $1.1 billion, 7-year senior secured notes offering at a 6.62coupon ata price of 100.75, yielding6.450%
The proceeds will be used to pay down the $913 million outstanding in termdebt, fund a tenoffer for the $120 millionoutstanding 2006 second-lien notes due 2014
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Specialty Chemicals MonthlyFebruary 2013
SPECIALTY CHEMICALS PUBLIC TRADING STATISTICS (Through February 20, 2013)
Source: Capital IQ, Reuters, SEC F ilings
$ in mill ions, except per share data
Stock Market Enterprise LTM EV / LTM Stock Performance (% Change) Consensus EPS Stock Price
Company Price Cap. Value EBITDA EBITDA 1 month 1 year YTD 2013E 2014E 2013E 2
H.B. Fuller Company FUL $40.47 $2,010 $2,334 $220 10.6x 2.4% 31.1% 16.2% $2.63 $3.13 15.4x
PPG Industries , Inc. PPG $131.51 $20,266 $22,527 $2,340 9.6x (7.9%) 42.8% (2.8%) $7.82 $8.95 16.8x
RPM International Inc. RPM $29.96 $3,965 $5,158 $464 11.1x (6.3%) 18.0% 2.0% $1.95 $2.19 15.4x
Sherwin-Williams Company SHW $159.33 $16,428 $17,342 $1,199 14.5x (2.9%) 58.8% 3.6% $7.87 $9.35 20.2x
Valspar Corporation VAL $60.73 $5,462 $6,483 $605 10.7x (9.4%) 31.7% (2.7%) $3.84 $4.48 15.8x
Average 11.3x (4.8%) 36.5% 3.3% 16.7x
Median 10.7x (6.3%) 31.7% 2.0% 15.8x
A. Schulman, Inc. SHLM $30.79 $903 $1,026 $126 8.1x (3.2%) 15.1% 6.4% $2.23 $2.58 13.8x
Albemarle Corporation ALB $64.06 $5,691 $6,011 $609 9.9x (0.6%) (3.3%) 3.1% $5.07 $5.72 12.6x
Cytec Indus tries Inc. CYT $72.01 $3,283 $2,666 $270 9.9x (2.3%) 25.0% 4.6% $4.85 $5.76 14.9x
Ferro Corporation FOE $5.31 $460 $783 $90 8.7x 15.7% (24.9%) 27.0% $0.07 $0.27 NM
Hexcel Corporation HXL $27.20 $2,730 $2,954 $292 10.1x (2.3%) 5.6% 0.9% $1.76 $2.00 15.5x
Innospec Inc. IOSP $40.23 $939 $941 $115 8.2x 1.0% 33.2% 16.6% $3.57 $3.88 11.3x
Kraton Performance Polymers, Inc. KRA $26.00 $839 $1,085 $94 11.5x (0.9%) (11.7%) 8.2% $2.48 $2.55 10.5x
Minerals Technologies Inc. MTX $40.77 $1,443 $1,090 $160 6.8x (1.3%) 22.4% 2.1% $2.27 $2.51 18.0x NewMarket Corporation NEU $246.65 $3,310 $3,686 $408 9.0x (12.9%) 31.1% (5.9%) $18.59 $19.94 13.3x
PolyOne Corporation POL $22.05 $1,974 $2,473 $285 8.7x (1.8%) 49.0% 8.0% $1.34 $1.80 16.4x
Spartech Corporation SEH $9.56 $298 $432 $56 7.7x (1.3%) 49.1% 5.4% $0.31 $0.62 30.8x
Stepan Company SCL $62.29 $1,295 $1,369 $179 7.6x 8.3% 44.3% 12.2% $4.46 $4.79 14.0x
W.R. Grace & Co. GRA $71.00 $5,365 $5,134 $609 8.4x (0.2%) 26.7% 5.6% $4.52 $5.05 15.7x
Average 8.8x (0.1%) 20.1% 7.3% 15.6x
Median 8.7x (1.3%) 25.0% 5.6% 14.4x
American Vanguard Corp. AVD $32.02 $898 $929 $68 13.6x 1.2% 92.1% 3.1% $1.23 $1.62 25.9x
Ashland Inc. ASH $77.60 $6,129 $9,251 $1,359 6.8x (8.7%) 19.8% (3.5%) $7.76 $9.03 10.0x
Cabot Corporation CBT $37.61 $2,399 $3,939 $488 8.1x (11.6%) (8.3%) (5.5%) $3.55 NA 10.6x
Celanes e Corporation CE $47.50 $7,583 $9,692 $1,209 8.0x 0.6% (8.5%) 6.7% $4.31 $5.02 11.0x
Chemtura Corporation CHMT $22.75 $2,223 $2,797 $382 7.3x (5.4%) 55.7% 7.0% $1.47 $1.81 15.5x
Eastman Chemical Co. EMN $70.22 $10,769 $15,517 $1,663 9.3x (1.4%) 28.6% 3.2% $6.42 $7.14 10.9x
FMC Corp. FMC $58.23 $8,017 $8,905 $823 10.8x (3.9%) 20.5% (0.5%) $3.94 $4.53 14.8x
Huntsman Corporation HUN $16.83 $4,037 $7,479 $1,362 5.5x (4.2%) 22.0% 5.8% $1.72 $2.29 9.8x Innophos Holdings Inc. IPHS $46.73 $1,015 $1,164 $152 7.6x (9.2%) (6.5%) 0.5% $3.67 $4.36 12.7x
Koppers Holdings Inc. KOP $41.09 $846 $1,093 $158 6.9x 1.0% 7.0% 7.7% $3.67 $4.21 11.2x
Olin Corp. OLN $22.66 $1,817 $2,441 $378 6.5x (0.6%) 6.1% 5.0% $2.12 $2.20 10.7x
OM Group, Inc. OMG $26.20 $848 $1,126 $143 7.8x 13.0% (15.1%) 18.0% $1.31 $2.00 20.0x
OMNOVA Solutions Inc. OMN $8.08 $379 $688 $104 6.6x 6.0% 47.2% 15.3% $0.69 $0.95 11.7x
Quaker Chemical Corporation KWR $56.83 $743 $761 $76 10.0x (3.4%) 30.8% 5.5% $3.33 $3.73 17.1x
Rockwood Holdings , Inc. ROC $58.99 $4,629 $6,360 $764 8.3x 10.2% 7.5% 19.3% $3.85 $4.86 15.3x
Westlake Chemical Corporation WLK $87.05 $5,806 $5,655 $760 7.4x 0.5% 43.9% 9.8% $6.33 $6.93 13.7x
Zep Inc. ZEP $14.59 $327 $575 $58 9.9x 0.2% (11.7%) 1.0% $1.24 $1.51 11.8x
Average 8.3x (0.9%) 19.5% 5.8% 13.7x
Median 7.8x (0.6%) 19.8% 5.5% 11.8x
Balchem Corp. BCPC $37.43 $1,099 $952 $69 13.7x 0.3% 3.5% 2.7% $1.48 $1.95 25.2x
International Flavors & Fragrances Inc. IFF $72.44 $5,909 $6,615 $565 11.7x 2.7% 27.9% 8.9% $4.39 $4.83 16.5x
Sensient Technologies Corp. SXT $36.80 $1,831 $2,150 $240 9.0x (3.2%) (4.4%) 3.5% $2.67 $2.99 13.8x
Sigma-Aldrich Corporation S IAL $76.38 $9,200 $9,132 $809 11.3x (0.7%) 6.1% 3.8% $4.16 $4.46 18.4x
Average 11.4x (0.2%) 8.3% 4.7% 18.5x
Median 11.5x (0.2%) 4.8% 3.6% 17.4x
Overall Average 9.2x (1.1%) 20.7% 5.8% 15.2x
Overall Median 8.7x (1.3%) 22.0% 5.0% 14.8x
S&P 500 1,511.95 1.7% 11.1% 6.0%
Ticker
Adhesives,Sealants
&
Coatings
AdvancedMaterials,Polymers
&
Additives
FineCh
emicals
Diversified
7/28/2019 Keybanc CM_Chemicals Update
9/11
Specialty Chemicals MonthlyFebruary 2013
SPECIALTY CHEMICALS PUBLIC TRADING STATISTICS (Through February 20, 2013)
Source: Capital IQ, Standard & Poors, SEC Filings
$ in millions
Total Net Total Debt / Net Debt / Total Debt / LTM EBITDA / LT S
Company Ticker Debt Debt LTM EBITDA LTM EBITDA LTM EBITDA Capital Interest RatH.B. Fuller Company FUL $520 $320 $220 2.4x 1.5x 39.9% 11.1x BB
PPG Industries, Inc. PPG $4,001 $1,990 $2,340 1.7x 0.9x 49.2% 11.1x BB
RPM International Inc. RPM $1,426 $1,043 $464 3.1x 2.2x 50.6% 6.2x BB
Sherwin-Williams Company SHW $969 $914 $1,199 0.8x 0.8x 35.3% 28.0x A
Valspar Corporation VAL $1,270 $1,021 $605 2.1x 1.7x 51.3% 8.9x BB
Average 2.0x 1.4x 45.3% 13.1x
Median 2.1x 1.5x 49.2% 11.1x
A. Schulman, Inc. SHLM $223 $116 $126 1.8x 0.9x 29.9% 15.7x -
Albemarle Corporation ALB $699 $222 $609 1.1x 0.4x 26.6% 18.6x BB
Cytec Industries Inc. CYT $707 $527 $270 2.6x 2.0x 28.1% 9.0x BB
Ferro Corporation FOE $337 $312 $90 3.8x 3.5x 55.2% 3.2x B+
Hexcel Corporation HXL $257 $224 $292 0.9x 0.8x 20.5% 29.2x BB
Innospec Inc. IOSP $30 $3 $115 0.3x NM 8.6% NM NR
Kraton Performance Polymers, Inc. KRA $448 $246 $94 4.8x 2.6x 45.7% 3.4x BB-
Minerals Technologies Inc. MTX $93 ($376) $160 0.6x NM 10.2% NM -NewMarket Corporation NEU $465 $376 $408 1.1x 0.9x 53.6% 25.2x BB
PolyOne Corporation POL $707 $497 $285 2.5x 1.7x 52.8% 5.5x BB-
Spartech Corporation SEH $135 $134 $56 2.4x 2.4x 42.8% 4.7x -
Stepan Company SCL $150 $73 $179 0.8x 0.4x 23.7% 18.7x -
W.R. Grace & Co. GRA $1,096 ($241) $609 1.8x NM 77.5% 13.1x NR
Average 1.9x 1.6x 36.6% 13.3x
Median 1.8x 1.3x 29.9% 13.1x
American Vanguard Corp. AVD $54 $30 $68 0.8x 0.4x 20.1% 25.1x -
Ashland Inc. ASH $3,610 $3,122 $1,359 2.7x 2.3x 46.5% 6.6x BB
Cabot Corporation CBT $1,501 $1,409 $488 3.1x 2.9x 43.3% 9.4x BB
Celanese Corporation CE $3,121 $2,109 $1,209 2.6x 1.7x 64.3% 6.5x -
Chemtura Corporation CHMT $754 $567 $382 2.0x 1.5x 39.9% 6.2x BB-
Eastman Chemical Co. EMN $4,985 $4,748 $1,663 3.0x 2.9x 62.4% 11.6x BB
FMC Corp. FMC $965 $888 $823 1.2x 1.1x 38.3% 18.2x A-
Huntsman Corporation HUN $3,706 $3,319 $1,362 2.7x 2.4x 66.2% 6.0x BBInnophos Holdings Inc. IPHS $176 $149 $152 1.2x 1.0x 28.4% 25.5x -
Koppers Holdings Inc. KOP $296 $229 $158 1.9x 1.5x 63.8% 5.6x BB-
Olin Corp. OLN $714 $549 $378 1.9x 1.4x 41.7% 14.3x BB
OM Group, Inc. OMG $467 $240 $143 3.3x 1.7x 27.3% 2.7x BB-
OMNOVA Solutions Inc. OMN $452 $309 $104 4.3x 3.0x 77.6% 2.9x B
Quaker Chemical Corporation KWR $39 $8 $76 0.5x 0.1x 11.9% 17.1x -
Rockwood Holdings, Inc. ROC $2,752 $1,478 $764 3.6x 1.9x 59.0% 8.8x -
Westlake Chemical Corporation WLK $764 ($151) $760 1.0x NM 29.0% 17.7x BB
Zep Inc. ZEP $253 $249 $58 4.4x 4.3x 59.5% 9.2x -
Average 2.4x 1.9x 45.8% 11.4x
Median 2.6x 1.7x 43.3% 9.2x
Balchem Corp. BCPC $0 ($145) $69 NM NM 0.0% NM -
International Flavors & Fragrances Inc. IFF $1,031 $707 $565 1.8x 1.3x 45.2% 13.5x BB
Sensient Technologies Corp. SXT $334 $319 $240 1.4x 1.3x 22.4% 14.2x NR
Sigma-Aldrich Corporation SIAL $683 ($68) $809 0.8x NM 21.2% NM A+
Average 1.4x 1.3x 22.2% 13.9x
Median 1.4x 1.3x 21.8% 13.9x
Overall Average 2.1x 1.7x 40.2% 12.4x
Overall Median 1.9x 1.5x 41.7% 11.1x
Adhesives,Sealants
&
Coatings
FineCh
emicals
AdvancedMaterials,Polymers
&
Additives
Diversified
7/28/2019 Keybanc CM_Chemicals Update
10/11
Specialty Chemicals Monthly
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
9.0x
10.0x
Feb-08 Aug-08 Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Aug-12 Feb-13
(80%)
(60%)
(40%)
(20%)
0%
20%
40%
60%
80%
100%
120%
Feb-08 Aug-08 Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Aug-12 Feb-13
KBCM Specialty
Chemicals IndexS&P 500
Last 12 Months 20.7% 11.1%
Last 3 Months 15.6% 8.7%
Last 1 Month (1.1%) 1.7%
February 2013
SPECIALTY CHEMICALS VALUATIONS (Through February 20, 2013)
5-Year Index Performance
KBCMs Specialty Chemicals Index traded down (1.1%) for the month ended February20th
, versus a 1.7% increase in theS&P 500
88.7%
11.2%
5-Year Enterpr ise Value / LTM EBITDA Valuations
KBCM Specialty Chemicals Index valuations increased to 9.0x EV / LTM EBITDA as of February 20th
Average: 7.4X
Source: Capital IQ, SEC FilingsNote: KBCM Specialty Chemicals Index includes: ALB, ASH, AVD, BCPC, CBT, CE, CHMT, CYT, EMN, FMC, FOE, FUL, HUN, HXL, IFF, IOSP, IPHS,KOP, KRA, KWR, MTX, NEU, OLN, OMG, OMN, POL, PPG, ROC, RPM, SCL, SEH, SHLM, SHW, SIAL, SXT, VAL, WLK, ZEP
7/28/2019 Keybanc CM_Chemicals Update
11/11
Specialty Chemicals MonthlyFebruary 2013
SELECT KEYBANC CAPITAL MARKETS TRANSACTION EXPERIENCE
Client Business DescriptionDeal Value
($ mm) Type Clo
PolyOne Corp.
Specialized polymer materials, services,
and solutions $600 Co-Manager Senior Notes Fe
DuBois Chemicals(Aurora Capital)
Manufactures metalworking fluids,cleaners, and paper chemicals
$150Joint Lead Arranger, Joint Bookrunner &
Documentation Agent Senior Credit FacilityDe
DuBois Chemicals(Aurora Capital)
Manufactures metalworking fluids,cleaners, and paper chemicals
ND Co-Buy-Side Advisor De
NewMarketCorp. Manufactures petroleum additives $350 Co-Manager Senior Notes De
Sherwin-Williams Paints,coatings and related products $1,000 Co-Manager Senior Notes De
GEO Specialty ChemicalsManufactures paints, coating products,and polyester diols
$120 Syndication Agent Senior Credit Facility No
American PacificManufactures fine and specialtychemicals
$85Joint Lead Arranger, Sole Bookrunner &
Admi nis trat ive Agent Senio r Secu red Cr edit Facil ityOc
Sherwin-Williams Paints,coatings and related products C$75Joint Lead Arranger, Sole Bookrunner &
Admi nis trat ive Agent Senio r Secu red Cr edit Facil ityJ u
RPM International
Industrial and consumer specialty
chemical products $600
Joint Lead Arranger, Joint Bookrunner & Co-
Syndication Agent Senior Unsecured Credit Facility J u
DuBois Chemicals(The Riverside Company)
Manufactures metalworking fluids,cleaners, and paper chemicals
$114Sole Lead Arranger, Sole Bookrunner &
Admi nis trat ive Agent Senio r Secu red Cr edit Facil ityAp
Citadel Plastics Holding(WindPoint Partners)
Global compounder of thermoplastic andthermoset resins
ND Sell-Side Advisor Fe
Citadel Plastics Holding(Huntsman Gay Global Capital)
Global compounder of thermoplastic andthermoset resins
$185Joint Lead Arranger, Joint Bookrunner & Syndication
Agent Senio r Secur ed Cred it Fac ili tyFe
Arizona Chemical Company(American Securities)
Manufactures naturally derived specialtyresins and pine-based chemicals
$610 Co-Agent De
PolyOne Corp.Specialized polymer materials, services,and solutions
$300 Documentation Agent Revolving Credit Facility De
Stepan CompanyProducer of specialtyand intermediatechemicals
$65 Sole Lead Placement Agent No
Quaker Chemical CorporationGlobal developer and provider of highperformance specialty chemical products
$45 Co-Manager Follow-on Offering Ma
Kraton P erformance P olymers
(CCMP & TPG)
Styrenic block copolymers for use in
industrial and consumer applications $377 Co-Manager Follow-on Offering Ma
GenTekInc.(American Securities)
Manufactures industrial components andperformance chemicals
$425 Syndication Agent Senior Credit Facility Ma
Cornerstone Chemical Company(H.I.G. Capital)
Manufactures key intermediate chemicalcriticals
$120 Joint Lead Arranger Senior Secured Credit Facility Ma
Flow Polymers Inc.Manufactures rubberprocessingchemicals for a variety of applications
ND Sell-Side Advisor De
OMNOVA Solutions, Inc.Emulsion polymers, specialty chemicals,and functional surfaces
$250 Lead Manager Senior Notes Oc
Ferro Corp.Electronic and performance materials,porcelain enamel, and polymer additives
$250 Co-Manager Senior Notes Au
Arch Chemicals, Inc.Biocides and specialty chemicalsmanufacturer and supplier
NDSell-Side Advisor Sayerlack Industrial Wood
CoatingsMa
SelectTransactions
SPECIALTY CHEMICALS TEAM CONTACTS
Ben Whiting216.689.4120
For additional information on KeyBanc Capital Markets Specialty Chemicals Practice, please contact any of the individuals listed below
Mario Toukan216.689.4663
Key Tower, Floor 6 127 Public Square Cleveland, OH 44114