Platform Acquisition Holdings Limited has entered into a definitive agreement to acquire MacDermid, Inc., a global provider of high value-added specialty chemicals, for approximately $1.8 billion plus contingent consideration. Platform will be renamed Platform Specialty Products Corporation (PSP). Following the close of the transaction, PSP expects to complete a listing of its shares on the New York Stock Exchange by the end of 2013.
MacDermid is a global specialty chemicals company serving more than 3,500 customers in 24 countries across the electronics, graphic arts, metals, oil production and drilling and plastics finishing industries. MacDermid's culture and core strengths in R&D and technical service accelerate growth and drive margins, while its low fixed cost structure creates resilience through economic cycles.
MacDermid has delivered consistent and strong financial results, including an estimated $742 million in sales and $180 million in adjusted EBITDA for the 12 months ended Sept. 30, 2013. In addition, the company maintains a robust margin profile, including an estimated gross margin of 51.0% and an estimated adjusted EBITDA margin of 24.3% over the same period. MacDermid generated $148 million in free cash flow in 2012, with a cash conversion ratio of 91.1%. The business historically requires minimal capital expenditures, typically less than 2% of revenue.
MacDermid will continue to be operated as a standalone business by its existing management team under the PSP umbrella. At closing, Platform intends to change the composition of its Board in anticipation of its move from the London Stock Exchange to the New York Stock Exchange. The reconstituted Board of Directors will consist of a deep bench of talent with expertise and experience in building best-in-class public companies and positioning them for success.
Martin Franklin, founder and executive chairman of Jarden Corporation, will serve as PSP's chairman, to provide ongoing strategic guidance over the long term. MacDermid's existing executive team will become PSP's new executive team. Daniel Leever, MacDermid's chairman and CEO, will become PSP's CEO and vice chairman. During Leever's 35-year tenure at MacDermid, the company's revenues have increased five-fold and firm value increased 20 fold through strong organic growth complemented by strategic acquisitions. Frank Monteiro, MacDermid's chief financial officer, will become the CFO of PSP.
"As we look to build a portfolio of market-leading specialty chemicals businesses, MacDermid is a natural choice to serve as the initial investment and foundation for Platform Specialty Products,” Franklin, Platform's founder and director, says. “MacDermid's heritage and market presence make it a leader within the sector, and this transaction will provide the company with the tools and resources necessary to reach the next level of success.
“We will maintain and respect the integrity of the seasoned and skilled management team as well as the MacDermid brand, products and operations, which have achieved consistent and impressive growth,” Franklin adds. “We look forward to this being a successful, long-term partnership and are confident that this transaction will be the first of many milestones we will achieve together."
"I'm delighted that MacDermid has found a permanent home from which we can achieve our long-term vision of being a leading global specialty chemicals company,” Leever says. “Our business is characterized by a blended chemistry manufacturing model that is inherently non-capital intensive and requires high levels of innovation and technical service. This 'asset-lite, high-touch' business model enables us to deliver results to a diversified customer base, resulting in significant free cash flow to support organic growth and growth through acquisitions.
MacDermid to be acquired for $1.8 billion
Published October 16, 2013
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