COVINGTON, Ky. and WILMINGTON, Del., Nov. 13 /PRNewswire-FirstCall/ --
Ashland Inc. (NYSE: ASH) today completed its acquisition of Hercules
Incorporated, creating a leading specialty chemicals company serving many of
the world's most essential needs and industries. Each share of Hercules common
stock outstanding was exchanged for $18.60 in cash and 0.093 of a share of
Ashland common stock. A letter of transmittal and instructions for exchanging
Hercules shares for shares of Ashland stock and cash consideration will be
mailed shortly to the Hercules shareholders of record at the close of business
on Nov. 13, 2008.
(Logo: http://www.newscom.com/cgi-bin/prnh/20040113/ASHLANDLOGO )
"This is a landmark day for our combined employees, customers,
shareholders and all those with whom we interact," said James J. O'Brien,
Ashland chairman and chief executive officer. "Together, we now begin working
to build an exciting new future, confident that our people, technologies,
products and services will drive our growth for years to come."
Transformation overview
Ashland now comprises a core of three specialty chemical businesses that
will drive the company both strategically and financially, generating
approximately 75 percent of total EBITDA on a pro forma basis. These
businesses -- paper and water technologies, specialty resins, and specialty
additives and functional ingredients -- hold strong market positions and
promising global growth potential. Ashland's logistics efficiencies and
well-developed marketing capabilities in consumer markets complement its core
businesses and enhance its ability to deliver valued products and services.
"This transaction better positions Ashland to deliver more stable and
predictable earnings, generate stronger cash flows and gain access to higher
growth markets worldwide, most especially those in emerging economies," said
O'Brien.
Ashland anticipates approximately $120 million in annual run-rate savings
by eliminating redundancies and capturing operational efficiencies by the end
of fiscal year 2010.
"Our integration team, guided by Ted Harris and supported by key
representatives of both companies, has already provided a solid foundation for
our continued development as one company," said O'Brien. "Their ongoing
management of this activity is focused on successfully integrating the best
processes from both companies, achieving our synergy and cost-saving targets
and pursuing the new opportunities for growth."
The expanded international presence of Ashland as a result of the
transaction will increase revenue derived outside North America to roughly 35
percent of the total $10.7 billion of pro forma revenue for the 12 months
ended Sept. 30, 2008.
New commercial structure
Ashland's new structure, incorporating the former Hercules businesses
effective today, is composed of five commercial units:
-- Ashland Hercules Water Technologies, a $2 billion specialty paper and
water chemicals business formed from the related operations of Hercules and
Ashland;
-- Ashland Performance Materials, the specialty resins business serving
construction, infrastructure, energy and transportation segments;
-- Ashland Aqualon Functional Ingredients, a fast-growing business of
specialty additives and functional ingredients derived from renewable
resources, and serving personal care, pharmaceuticals, food, construction,
transportation and other industries;
-- Ashland Consumer Markets, the Valvoline(R) lubricants, automotive
appearance and service business; and
-- Ashland Distribution, North America's leading distributor of chemicals,
plastics, composite materials and environmental services.
Transaction Details
The cash portion of the transaction was funded through a combination of
cash on hand and debt financing from Bank of America and Scotia Capital.
Citigroup Global Markets Inc. acted as financial advisor, and Squire,
Sanders & Dempsey LLP acted as legal counsel, to Ashland. Credit Suisse
Securities (USA) LLC acted as financial advisor, and Wachtell, Lipton, Rosen &
Katz acted as legal counsel, to Hercules.
About Ashland
The corporate headquarters for Ashland will remain in Covington, Ky. The
Hercules administrative facility in Wilmington, Del., now becomes the
operations center for the Ashland Aqualon Functional Ingredients and the
Ashland Hercules Water Technologies commercial units. To capitalize on the
opportunities of emerging economies, the company recently repositioned the
operations center for its Ashland Performance Materials commercial unit to
Barendrecht, the Netherlands, where it can serve growing demands in Eastern
Europe and as a central point for operations in the Americas and Asia Pacific.
Ashland Consumer Markets (Valvoline) will maintain its operations base in
Lexington, Ky., and Ashland Distribution will continue to be based in Dublin,
Ohio. A series of technical and research and development centers will also be
maintained around the world.
Ashland Inc. (NYSE: ASH) provides specialty chemical products, services
and solutions for many of the world's most essential needs and industries.
Serving customers in more than 100 countries, it operates through five
commercial units: Ashland Hercules Water Technologies, Ashland Performance
Materials, Ashland Aqualon Functional Ingredients, Ashland Consumer Markets
(Valvoline) and Ashland Distribution. To learn more about Ashland, visit
http://www.ashland.com .
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Forward-Looking Statements
This news release contains forward-looking statements, within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The statements include those made with respect to
Ashland's operating performance and Ashland's acquisition of Hercules
Incorporated. These expectations are based upon a number of assumptions,
including those mentioned within this news release. Performance estimates are
also based upon internal forecasts and analyses of current and future market
conditions and trends, management plans and strategies, weather, operating
efficiencies and economic conditions, such as prices, supply and demand, cost
of raw materials, and legal proceedings and claims (including environmental
and asbestos matters). These risks and uncertainties may cause actual
operating results to differ materially from those stated, projected or
implied. Such risks and uncertainties with respect to Ashland's acquisition of
Hercules include the possibility that the benefits anticipated from the
Hercules transaction will not be fully realized; the substantial indebtedness
Ashland has incurred to finance the acquisition may impair Ashland's financial
condition; the restrictive covenants under the debt instruments may hinder the
successful operation of Ashland's business; future cash flow may be
insufficient to repay the debt; and other risks that are described in filings
made by Ashland with the Securities and Exchange Commission (SEC). Although
Ashland believes its expectations are based on reasonable assumptions, it
cannot assure the expectations reflected herein will be achieved.
This forward-looking information may prove to be inaccurate and actual
results may differ significantly from those anticipated if one or more of the
underlying assumptions or expectations proves to be inaccurate or is
unrealized or if other unexpected conditions or events occur. Other factors,
uncertainties and risks affecting Ashland are contained in Ashland's periodic
filings made with the SEC, including its Form 10-K for the fiscal year ended
Sept. 30, 2007, and Forms 10-Q for the quarters ended Dec. 31, 2007, and March
31 and June 30, 2008, which are available on Ashland's Investor Relations
website at http//:www.ashland.com/investors or the SEC's website at
http://www.sec.gov . Ashland undertakes no obligation to subsequently update
or revise the forward-looking statements made in this news release to reflect
events or circumstances after the date of this news release.
