Attached files
file | filename |
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8-K - TREDEGAR CORPORATION 8-K 10-24-2011 - TREDEGAR CORP | form8k.htm |
EX-99.2 - EXHIBIT 99.2 - TREDEGAR CORP | ex99_2.htm |
EX-99.1 - EXHIBIT 99.1 - TREDEGAR CORP | ex99_1.htm |
Shareholder Conference Call
Terphane Acquisition
Terphane Acquisition
October 26, 2011
Exhibit 99.3
Nancy Taylor
2
Forward-Looking Statements
These forward-looking statements are not historical facts, but
statements that involve risks and uncertainties. Actual results could
differ materially from those included in or implied by these forward-
looking statements. Factors that may cause actual results to differ
materially from those contemplated by these forward-looking
statements include those discussed in the reports Tredegar files with
or furnishes to the Securities and Exchange Commission (the “SEC”)
from time-to-time, including the risks and important factors set forth in
additional detail in “Risk Factors” in Tredegar’s 2010 Annual Report
on Form 10-K filed with the SEC. Except as required by applicable
law or regulations, Tredegar does not undertake, and specifically
disclaims any obligation, to update or revise any forward-looking
statement.
statements that involve risks and uncertainties. Actual results could
differ materially from those included in or implied by these forward-
looking statements. Factors that may cause actual results to differ
materially from those contemplated by these forward-looking
statements include those discussed in the reports Tredegar files with
or furnishes to the Securities and Exchange Commission (the “SEC”)
from time-to-time, including the risks and important factors set forth in
additional detail in “Risk Factors” in Tredegar’s 2010 Annual Report
on Form 10-K filed with the SEC. Except as required by applicable
law or regulations, Tredegar does not undertake, and specifically
disclaims any obligation, to update or revise any forward-looking
statement.
This presentation contains non-GAAP financial measures. A
reconciliation of those numbers to U.S. GAAP financial measures is
available on the company’s website at www.tredegar.com under
“Investors”.
reconciliation of those numbers to U.S. GAAP financial measures is
available on the company’s website at www.tredegar.com under
“Investors”.
Our Focus is Manufacturing
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Delivering on Our Acquisition Strategy -
Our Stated Objectives
Our Stated Objectives
• Business Development as a means for market and
customer diversification
customer diversification
• Our stated criteria for acquisition: Manufacturing
presence with:
presence with:
– Defendable competitive advantage
– Growth potential
– Diversified customer base
– Good management
– Favorable market relative to macro trends
– Global position or opportunity to globalize
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Delivering on Our Acquisition Strategy:
Terphane Meets All of Our Criteria
Terphane Meets All of Our Criteria
• A leading manufacturer of specialized polyester films
(PET) in Latin American market
(PET) in Latin American market
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Delivering on Our Acquisition Strategy:
Terphane Provides Growth Opportunity
Terphane Provides Growth Opportunity
• Brazil - High Growth and Sound Economy
– Growing middle class, growing population
of new consumers
• Key Growth Area for
Branded Products
– Appetite for branded food
and consumer goods
– Market demand for packaging
technology
• U.S. - Niche, High-Value Products
Distribution of Population
> 20MM People Join Middle Class Since 2005
42%
42%
44%
46%
48%
50%
52%
53%
29%
30%
28%
24%
23%
21%
18%
18%
0%
12%
24%
36%
48%
60%
2002
2003
2004
2005
2006
2007
2008
2009
Middle Income
Lower Income
Source: Fundacao Getulio Vargas
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Delivering on Our Acquisition Strategy:
Terphane Provides Strategic Fit
Terphane Provides Strategic Fit
• Highly complementary new customers and end
markets
markets
• Complements our existing expertise in specialty films
and broadens our product and technology portfolio
and broadens our product and technology portfolio
• Adds PET expertise to our Polypropylene (PP)
capabilities
capabilities
• Leverages R&D
• Share best practices - technology, process,
marketing
marketing
Tredegar Film Products:
New Latin American Footprint
New Latin American Footprint
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• Broader Presence
in the Americas:
in the Americas:
• Production facilities in Cabo
de Santo Agostinho, Brazil
and Bloomfield, NY
de Santo Agostinho, Brazil
and Bloomfield, NY
• Headquarters in São Paulo
Terphane
Tredegar Films
Kevin O’Leary
10
• Price: $188 million
• Funded with available cash on hand and $125 million in debt
from Tredegar’s existing $300 million revolving credit facility
from Tredegar’s existing $300 million revolving credit facility
• Net sales of $160 million for the last twelve months, as of
June 30, 2011
June 30, 2011
• Expected to be accretive within the next year
• Expected capacity expansion in support of strong growth
projections for the Brazilian market
projections for the Brazilian market
Financial Overview
Terphane Acquisition Highlights
Financial Overview
Sources
|
|
Uses
|
|
Cash
|
$ 68
|
Purchase Price
|
$ 188
|
Revolving Credit Facility
|
125
|
Transaction Costs
|
5
|
|
|
|
|
Total Sources
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$ 193
|
Total Uses
|
$ 193
|
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Sources & Uses
$ in millions
• Net Debt to Adjusted EBITDA at closing is less than 1.0 times
• Tredegar retains the financial strength to pursue strategies
that drive long-term shareholder value
Assuming June 30, 2011 cash levels and LTM historical financials plus borrowing for the transaction.
Financial Overview
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1. Historical results
2. Includes Other Operating Segments and Corporate Overhead
Combined Results for Films and Tredegar
Year Ended December 31, 2010
|
|||||
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Terphane1
|
Films
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Combined
Films |
|
Combined
Tredegar2 |
Net Sales
|
$127
|
$520
|
$647
|
|
$850
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Adjusted
EBITDA |
$ 28
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$105
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$133
|
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$118
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Last Twelve Months Ended June 30, 2011
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Terphane1
|
Films
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Combined
Films |
|
Combined
Tredegar2 |
Net Sales
|
$160
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$531
|
$691
|
|
$915
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Adjusted
EBITDA |
$ 44
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$103
|
$147
|
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$136
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$ in millions
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Purchase Price Summary
Purchase Price
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$188MM
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EBITDA Multiple (2010 EBITDA1)
|
6.7x
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EBITDA Multiple (LTM EBITDA; as of June 30,
20111) |
4.3x
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1. Based on Terphane’s historical financials
Financial Overview
Financial Overview
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Global PET Capacity Utilization Projections
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Summary
• Excited about the growth and diversification
opportunity
opportunity
• Meets our acquisition criteria
• Strong strategic fit with Films
• Expands our footprint
• Maintaining financial stability post-acquisition
Q&A