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8-K - FORM 8-K - KAYDON CORP | d306447d8k.htm |
EX-99.1 - PRESS RELEASE - KAYDON CORP | d306447dex991.htm |
EX-99.2 - PRESS RELEASE - KAYDON CORP | d306447dex992.htm |
Exhibit 99.3
Special Dividend and Recapitalization February 24, 2012
Exhibit 99.3
This presentation, and commentary, may contain statements reflecting our views about the Companys future performance. These statements are Forward-Looking Statements under the Private Securities Litigation Reform Act of 1995. Participants should refer to the comments contained in our Annual Report, which explain that various factors may affect our future performance.
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Executive Summary
Kaydons Board of Directors has declared a special dividend of $10.50 per share payable on March 26, 2012, to holders of record on March 5, 2012
The special dividend provides a significant return to shareholders while maintaining substantial financial capacity for both organic growth and growth through acquisition
This transaction effectively utilizes our excess cash and a portion of Kaydons debt capacity to immediately optimize our balance sheet and lower our cost of capital while preserving strategic flexibility
Following the $337 million payment, Kaydon will have conservative net leverage of 1.1X EBITDA, providing meaningful debt capacity for future growth
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Transaction Background
Payment of the special dividend is the result of our Boards continued review of capital allocation alternatives available to benefit our shareholders
This special dividend is an effective method to quickly deliver meaningful value to all of our shareholders in a straightforward transaction
In the last five years, Kaydons superior cash flow generation has enabled us to repurchase shares of $141 million and pay cash dividends of $105 million while investing $157 million in our existing businesses and funding acquisitions of $94 million, and still have over $225 million of cash at December 31, 2011
The special dividend is consistent with Kaydons strategy of efficiently allocating capital to internal growth requirements, acquisitions and cash returns to shareholders
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Compelling Financial Profile
Kaydons strong financial profile supports the recapitalization and conservative leverage associated with the special dividend
Kaydon has excellent cash flow generation, resulting from high margin businesses with strong and defensible positions in many of its major served markets
Kaydons strong historical free cash flow and low required capital expenditure supports rapid deleveraging of the balance sheet
Following the special dividend, Kaydons modest leverage will enable the Company to continue to capitalize on identified growth opportunities including pursuing opportunistic acquisitions, expanding sales coverage and expanding our geographic presence
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