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Eastman to Sell Portions of CASPI Segment

Published on 2004-06-03. Author : SpecialChem

Apollo Management, L.P., a private investment firm, and Eastman Chemical Company (NYSE:EMN) on 1st June, 2004, announced that they have signed an agreement for Apollo to acquire certain businesses and product lines in Eastman's coatings, adhesives, specialty polymers and inks (CASPI) segment. The acquisition, with a purchase price of $215 million, is subject to regulatory approval and other customary closing conditions. The purchase price includes cash of $165 million at closing, plus a $50 million note payable to Eastman. The companies anticipate a closing by the end of July 2004.

"We're pleased to announce this agreement with Apollo," said Brian Ferguson, Eastman's chairman and CEO. "We will be working closely with our customers to ensure a smooth transition as we move toward the closing of this transaction. I especially want to recognize the outstanding manner in which our employees in these businesses have continued to focus on meeting our customers'needs during the last several months as we worked toward the announcement we're making today. Completing this divestiture is a significant step forward in Eastman's ongoing strategy to improve the company's profitability."

"We are excited about this opportunity to own a business that is an important manufacturer and marketer of products sold into the coatings, composites, inks and textile businesses,"said Josh Harris, founding partner at Apollo Management. "These sectors should exhibit attractive growth in the future, and Apollo looks forward to working with the employees to allow this new company to realize its full potential."

J.P. Morgan Securities Inc. acted as exclusive financial advisor to Eastman on this transaction.

The following Eastman businesses and product lines are included in the divestiture: acrylate ester monomers, composites (unsaturated polyester resins), inks and graphics arts raw materials, liquid resins, powder resins and textile chemicals. Eastman had announced plans in August 2003 to restructure, divest or consolidate these businesses and product lines. Manufacturing sites to be divested include: Pleasant Prairie, Wis.; LaVergne, Tenn.; Carpentersville, Ill.; Roebuck, S.C.; Lynwood, Calif.; Columbus and Forest Park, Ga.; and Ennis, Texas, in the United States. Sites outside the U.S. include: Kallo, Belgium; Sant' Albano and Cola'di Lazise, Italy; Molndal, Sweden; Hamburg, Germany; Sokolov, Czech Republic; and Tianjin, Nanping and Funing, People's Republic of China. Approximately 2,100 employees are currently associated with this portion of Eastman's CASPI segment. Upon closing of the acquisition, these employees will become employees of the new owner.

With headquarters in Kingsport, Tenn., Eastman manufactures and markets chemicals, fibers and plastics. The company has approximately 15,000 employees in more than 30 countries and had 2003 sales of $5.8 billion.

Apollo Management, L.P., founded in 1990, is among the most active and successful private investment firms in the U.S. in terms of both number of investment transactions completed and aggregate dollars invested. Since its inception, Apollo has managed the investment of an aggregate of approximately $13 billion in equity capital in a wide variety of industries, both domestically and internationally.

Source: Eastman Chemical Company


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