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8-K - TREDEGAR CORPORATION 8-K 10-24-2011 - TREDEGAR CORPform8k.htm
EX-99.2 - EXHIBIT 99.2 - TREDEGAR CORPex99_2.htm
EX-99.1 - EXHIBIT 99.1 - TREDEGAR CORPex99_1.htm

Shareholder Conference Call
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.
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”.
 
 

 

Our Focus is Manufacturing
3
 
 
 

 
4
Delivering on Our Acquisition Strategy -
Our Stated Objectives
 Business Development as a means for market and
 customer diversification
 Our stated criteria for acquisition: Manufacturing
 presence with:
  Defendable competitive advantage
  Growth potential
  Diversified customer base
  Good management
  Favorable market relative to macro trends
  Global position or opportunity to globalize
 
 

 
5
Delivering on Our Acquisition Strategy:
Terphane Meets All of Our Criteria
 A leading manufacturer of specialized polyester films
 (PET) in Latin American market
 
 

 
6
Delivering on Our Acquisition Strategy:
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
 
 

 
7
Delivering on Our Acquisition Strategy:
Terphane Provides Strategic Fit
 Highly complementary new customers and end
 markets
 Complements our existing expertise in specialty films
 and broadens our product and technology portfolio
 Adds PET expertise to our Polypropylene (PP)
 capabilities
 Leverages R&D
 Share best practices - technology, process,
 marketing
 
 

 
Tredegar Film Products:
New Latin American Footprint
8
 Broader Presence
 in the Americas
:
  Production facilities in Cabo
 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
 Net sales of $160 million for the last twelve months, as of
 June 30, 2011
 Expected to be accretive within the next year
 Expected capacity expansion in support of strong growth
 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
 $ 193
Total Uses
 $ 193
11
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
12
1. Historical results
2. Includes Other Operating Segments and Corporate Overhead
Combined Results for Films and Tredegar
Year Ended December 31, 2010
 
Terphane1
Films
Combined
Films
 
Combined
Tredegar2
Net Sales
$127
$520
$647
 
$850
Adjusted
EBITDA
$ 28
$105
$133
 
$118
Last Twelve Months Ended June 30, 2011
 
Terphane1
Films
Combined
Films
 
Combined
Tredegar2
Net Sales
$160
$531
$691
 
$915
Adjusted
EBITDA
$ 44
$103
$147
 
$136
$ in millions
 
 

 
13
Purchase Price Summary
Purchase Price
$188MM
EBITDA Multiple (2010 EBITDA1)
6.7x
EBITDA Multiple (LTM EBITDA; as of June 30,
20111)
4.3x
1. Based on Terphane’s historical financials
Financial Overview
 
 

 
Financial Overview
14
Global PET Capacity Utilization Projections
 
 

 
15
Summary
 Excited about the growth and diversification
 opportunity
 Meets our acquisition criteria
 Strong strategic fit with Films
 Expands our footprint
 Maintaining financial stability post-acquisition
 
 

 
Q&A