Eastman Chemical To Acquire Taminco In $2.8 Bln Deal

(RTTNews) - Specialty chemical company Taminco Corp. (TAM) said Thursday that it has agreed to be acquired by Eastman Chemical Co. (EMN) for a total transaction value of about $2.8 billion in cash, including net assumed debt of $1 billion.

Eastman Chemical noted that the acquisition of Taminco will add attractive alkylamines stream to its chemical portfolio.

Under the terms of the definitive agreement, shareholders of Taminco will receive $26.00 in cash for each share of Taminco common stock, representing an 8.9 percent premium to Taminco's closing stock price of $23.88 on Wednesday, September 10. The transaction has been approved by the boards of directors of both companies.

Kingsport, Tennessee-based Eastman Chemical said in a separate statement that it will fund the acquisition with available cash and debt financing.

Allentown, Pennsylvania-based Taminco is a producer of alkylamines & derivatives and also a major producer of formic acid and derivatives.

The company's products are used by customers to make a diverse array of products for the agriculture, animal nutrition, water treatment, personal & home care and oil & gas end-markets. Taminco currently operates in 23 countries with eight production facilities.

Mark Costa, chairman and chief executive officer of Eastman Chemical, said, "As a specialty chemical company with consistent earnings growth and leading positions in attractive niche end markets, Taminco is a strong fit with Eastman's strategic focus."

Eastman Chemical noted that the acquisition of Taminco will strengthen its presence in attractive niche markets such as food, feed and agriculture. It will also provide opportunities for accelerating growth in the personal care, coatings, and oil and gas markets.

Eastman Chemical estimates total synergies from the acquisition to be about 5 percent of Taminco's 2013 sales revenues, with the majority expected to be realized over a period of two years following the acquisition.

The company also expects the acquisition to be accretive to its fiscal 2015 earnings by more than $0.35, excluding acquisition-related costs and charges, and also be accretive to its fiscal 2016 earnings by more than $0.60.

The deal includes a 30-day 'go-shop' period, during which Taminco, with the help of its financial advisor Morgan Stanley, will actively solicit, evaluate and potentially enter into talks with parties that offer alternative proposals.

Assuming that the go-shop process does not result in an alternative superior offer, the transaction is expected to close in the fourth quarter of 2014 and is subject to receipt of written approval by a majority of Taminco's shareholders.

Eastman Chemical has entered into a support agreement with affiliated investment funds of Apollo Global Management, LLC (APO), who own a majority of Taminco's common stock. Under the support agreement, Apollo has agreed to act by written consent to approve the present acquisition offer from Eastman Chemical.

Kirkland & Ellis LLP acted as legal advisor to Taminco, while Morgan Stanley & Co. LLC acted as its financial advisor and delivered a fairness opinion.

For Eastman Chemical, Jones Day acted as its legal advisor and Citigroup acted as its financial advisor.

Taminco also said it has canceled its Investor Day, which was previously scheduled for Monday, September 15, 2014.

TAM is currently trading at $26.69, up $2.81 or 11.77 percent on a volume of 810,562 shares.

EMN is trading at $84.65, up $1.43 or 1.72 percent on a volume of 1.81 million shares.