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Univar to acquire Nexeo Solutions for $2 billion

Staff Writer | September 18, 2018
Univar and Nexeo Solutions announced they have entered into a definitive agreement for Univar to acquire Nexeo in a cash and stock transaction valued at approximately $2.0 billion, including the assumption of Nexeo's debt and other obligations, or $11.65 per Nexeo share, subject to adjustment.
Univar
Acquisition   The transaction has been unanimously approved
The merger agreement provides for each share of Nexeo stock issued and outstanding to be converted into 0.305 shares of Univar common stock and $3.29 in cash, subject to adjustment at closing, representing a purchase price of $11.65 per share of Nexeo common stock, based on Univar's closing price on September 14, 2018 of $27.40.

The cash consideration is subject to a potential reduction of up to $0.41 per share, based on Univar's stock trading price prior to the completion of the acquisition.

Following the close, existing Nexeo equity warrants will be exercisable for the merger consideration in accordance with the terms of the warrant agreement.

The transaction is expected to deliver $100 million, or approximately $0.43 per share (after tax), in annual run-rate cost savings by the third year following close, and immediately reduce ongoing annual capital expenditures by $15 million.

It is expected to be accretive to Univar's Adjusted EPS beginning in the first full year following closing. Univar expects pro forma leverage ratio to be below 3.0x by the end of the first full year after closing.

The transaction has been unanimously approved by the Boards of Directors of both companies, and is anticipated to close in the first half of 2019, subject to the approval of both Univar and Nexeo shareholders, as well as receipt of regulatory approvals and satisfaction of other customary conditions. Nexeo's key stockholders, TPG and First Pacific, have agreed to provide consent for the proposed transaction.

Univar intends to finance the cash portion of the transaction and refinance Nexeo's existing debt with a combination of available cash and bank financing, for which it has received commitments.


 

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