Press Release
Texas Pacific Group to Acquire Kraton Polymers from Ripplewood Holdings, LLC Houston
November 10, 2003 - Texas Pacific Group (“TPG”) and Ripplewood Holdings LLC, both private investment firms, today jointly announced that they have entered into an agreement under which TPG will acquire the Kraton Polymers Group of Companies (“Kraton Polymers” or the “Company”), headquartered in Houston, Texas, from Ripplewood and other investors. The transaction values Kraton at a total enterprise value of $770 million and is expected to close by the end of the year.
Kraton Polymers is a premier, global specialty chemicals company and the world’s largest producer of styrenic block copolymers (“SBCs”), a family of products whose chemistry was pioneered by the Company over forty years ago. SBCs enhance the performance of applications including adhesives, sealants, asphalt and bitumen modification, footwear, packaging, compounding and personal hygiene products. The Company has the leading position in all of its core markets and is the only producer of SBCs with global manufacturing capability. The Company has manufacturing facilities in Belpre, OH, The Netherlands, Germany, France, Brazil and Japan. The business has annual revenues in excess of $600 million.
TPG partner Kelvin Davis said, “We are enthusiastic about the opportunity to acquire Kraton Polymers. The Company is a global market leader and has consistently demonstrated its ability to grow through innovation, customer service and quality excellence. We look forward to working with CEO Steve Wood and the Company’s management and employees in continuing to expand the Kraton franchise.”
Ian Snow, a Managing Director of Ripplewood, said, “Kraton has accomplished a great deal since we acquired the company in 2001, enabling us to earn an attractive return for our investors. Under the guidance of Chairman John Georges and the leadership of CEO Steve Wood and his management team, Kraton has improved its financial and operational performance and has expanded its position as the leading producer of styrenic block copolymers. We are confident that Kraton and its 1,000 employees worldwide will achieve continued success under Texas Pacific Group’s ownership.”
Kraton Polymers CEO Stephen Wood said, “We are enthusiastic about continuing to grow under TPG’s stewardship. Over the past three years, we have accomplished a great deal including our transition to a highly successful standalone company. The support and commitment shown by TPG gives me confidence that together we will find success in the next stage of our evolution.”
UBS Investment Bank acted as merger advisor to TPG. Morgan Stanley and Credit Suisse First Boston served as financial advisors to Ripplewood.
Ripplewood Holdings LLC (“Ripplewood”) is a New York based private equity firm established in 1995. Ripplewood manages approximately US$4 billion of committed capital through four institutional private equity funds, focusing primarily on investments in the United States and Japan. Ripplewood pursues an “Industrial Partnership” investment philosophy, in which the firm forms partnerships with world-class operating executives to acquire businesses in targeted industries and implements pre-defined strategies to enhance the value of these businesses. In the United States, Ripplewood’s investments include Asbury Automotive Group, Meyer’s Bakery, WRC Media and Lillian Vernon. In Japan, Ripplewood has invested in Columbia Music Entertainment, Japan Telecom, D&M Holdings, Phoenix Seagaia Resort, Niles Parts and Asahi Tec. In 1999, Ripplewood formed an investor consortium to acquire the former Long-Term Credit Bank of Japan (currently Shinsei Bank).
Texas Pacific Group, founded in 1993 and based in Fort Worth, TX, San Francisco, CA, and London, is a private investment partnership managing over $13 billion in assets. TPG seeks to invest in world-class franchises across a range of industries including significant investments in leading retailers (Petco, J.Crew, Punch Taverns - UK), branded consumer franchises (Burger King, Del Monte, Ducati), technology (ON Semiconductor, MEMC, Seagate), airlines (Continental, America West), and healthcare (Oxford Health Plans, Quintiles Transnational).
About Kraton
Kraton Polymers LLC is a premier, global specialty chemicals company and is the world’s largest producer of styrenic block copolymers (“SBCs”), a family of products whose chemistry was pioneered by Kraton over forty years ago. SBCs are highly-engineered synthetic elastomers, which enhance the performance of products by delivering a variety of attributes, including greater flexibility, resilience, strength, durability and processability. Kraton polymers are used in a wide range of applications including road and roofing materials, numerous consumer products (e.g., diapers, tool handles and toothbrushes), tapes, labels, medical applications, packaging, automotive and footwear products. Kraton has the leading position in nearly all of its core markets and is the only producer of SBCs with global manufacturing capability. Its production facilities are located in the United States, The Netherlands, Germany, France, Brazil, and Japan.
Polymer Holdings LLC is the parent company of Kraton Polymers LLC and has no material assets other than its investment in Kraton Polymers LLC.
Kraton, the Kraton logo and design are trademarks of Kraton Polymers LLC.
Forward Looking Statements
This presentation may include “forward-looking statements” which are statements other than statements of historical fact and are often characterized by the use of words such as “believes,” “expects,” “estimates,” “projects,” “may,” “will,” “intends,” “plans” or “anticipates,” or by discussions of strategy, plans or intentions. All forward-looking statements in this presentation are made based on management's current expectations and estimates, which involve risks, uncertainties and other factors that could cause results to differ materially from those expressed in forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements. We assume no obligation to update such information.
