Keybanc CM_Chemicals Update

7/28/2019 Keybanc CM_Chemicals Update

1/11

Specialty Chemicals MonthlyFebruary 2013

Market Commentary

Fine Chemicals: Active Pharmaceutical Industry

The active pharmaceutical ingredient (API) industry is expected to experience near-term growth of 2 3% in vaterms and 4 5% in volume terms. The expected growth will be driven by an increase in demand for contramanufacturing, specifically in late-phase clinical development and commercialization. Due to the expected increase demand, several API manufacturers are looking to secure Western-based assets to meet the needs of emergbiopharmaceutical and large pharmaceutical clients in the U.S. and Europe. As a result, manufacturers have recenexpanded or are in the process of expanding capacity. These manufacturers include Cambridge Major LaboratoriAlbemarle and American Pacific. Additionally, Lonza recently established a joint venture in China to develop amanufacture generic pharmaceuticals and is planningto establisha jointventure in South Americato produce APIs.

Ethylene Market Update

Ethane-based ethylene margins, basedon contractprices, reached 31.22 cents/lb., as trackedbyICIS, which represethe highest level since 2000. The margin increase was primarily due to a nearly 50% decline in average U.S. ethaprices during 2012. Ethane prices continue to fall as newly abundant supplies of natural gas from share formatiobecome available. According to the U.S. National Intelligence Council (NIC), U.S. production of ethane has increas

by nearly 50% per year between 2007 and 2011. Ethylene profitability is expected to be similar in 2013as cheap liqnatural gas feedstock prices are expected to remain low. U.S. based ethylene producers are currently enjoying a macost advantage over other regions, specifically Europe and Asia, where ethylene production is predominately based naphtha, whichhas experiencedrising costs.

Mergers & Acquisitions and Capital Markets Update (see pg. 3-7)

On February13, PolyOnecompleteda $600million, 10-year seniorunsecurednotes offeringata 5.250%coupon to fua portion of its acquisition of Spartech, make a $50 million pension contribution and repay its senior secured termloKeyBanc Capital Markets acted as a Co-Manager on the offering

On February 12, Milacron agreed to acquire Mold-Masters, the Canadian-based manufacturer of advanced hot runnsystems, temperature controllers andauxiliaryequipmentfor theplastic industry, for$967million (3.6x 2012sales)

On J anuary 21, OM Group announced the sale of its cobalt refinery assets in Kokkola, Finland to a joint venture to

held byFreeport-McMoRan Copper & Gold, Lundin Mining Corporation, and La Generale des Carrieres etdes Mines $325million, plus thepotential for$110million inadditionalpayments over threeyears, basedonanearnout

Source: Company Filings, Press Releases, IHS Chemical Week, ICIS, Equity Research

Markets Update (see pg. 10)

The KeyBanc Capital Markets (KBCM) Specialty Chemicals Index has traded up year to date for the period endFebruary 20th, increasing 5.8% in the period, compared to a 6.0% increase in the S&P 500. The Chemical Index is 15.6% overthelast threemonthsvs. a 8.7%increase for theS&P 500

Disclosure: KeyBanc Capital Markets is a trade name underwhich corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc., MemberNYSE/FINRA/SIPC, and KeyBank National Association (KeyBank N.A.), are marketed. Securities products and services are offered by KeyBanc Capital Markets Inc. and its licensed securitiesepresentatives, who may also be employees of KeyBank N.A. Banking products and services are offered by KeyBank N.A. This report was not issued by our research department. The information

contained in this report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should notbe relied upon as such. This report does not purport to be acomplete analysis of anysecurity, issuer, or industry and is notan offer or a solicitation of an offer to buyor sell anysecurities. This reportis prepared forgeneral information purposes onlyand does

notconsiderthe specific investmentobjectives, financial situationandparticularneeds of anyindividual person or entity.

SPECIALTY CHEMICALS REVIEW


2/11

Specialty Chemicals Monthly

P LA ST IC S H D P E LD P E

End of M onth P rice $0.64 $0.73

M oM % Change 5.8% 3.2%

YoY % Change (3.1%) 0.7%

P LA ST IC S P P P S P VC

End of M onth P rice $0.79 $1.04 $1.39

M oM % Change 11.7% 2.5% 0.0%

YoY % Change 14.5% 4.8% 69.5%

A R OM A T IC S B en ze ne T o lu en e St yr ene


M oM % Change (2.1%) 5.9% 5.4%

YoY % Change 13.2% 12.6% 19.8%

OLEF IN S Et hylene P ro pylene B ut adiene


M oM % Change (3.1%) 17.6% 17.0%

YoY % Change (7.5%) 8.9% (36.0%)

N A T . R E SO UR C E S P a l m O il N a t . R u bb er

End of M onth P rice $865 $1.43

M oM % Change 4.8% (7.6%)

YoY % Change (23.1%) (22.2%)

$0.4

$0.6

$0.8

$1.0

$1.2

$1.4

$1.6

J an-12 Apr-12 J ul-12 Oct-12 J an-13

US$

/bbl

PP (HoPP ) PS (HIP S) PVC

$0.4

$0.5

$0.6

$0.7

$0.8

$0.9

$1.0

J an-12 Apr-12 J ul-12 Oct-12 J an-13

US$

/bbl

HDP E (Inj. Mold Grade) LDPE (Film)

$0.3

$0.4

$0.5

$0.6

$0.7

$0.8

$0.9

$2.5

$3.0

$3.5

$4.0

$4.5

$5.0

$5.5

Feb-12 May-12 Aug-12 Nov-12 Feb-13

US$

/lb

US$

/gal

Benzene Toluene Styrene

$0.0

$0.5

$1.0

$1.5

$2.0


US$

/lb

Ethylene Butadiene Propylene

February 2013

RAW MATERIAL PRICE TRENDS (Through February 20, 2012)

Natural Resources

Petrochemicals (Gulf Coast)

Plastics[1]

Source: Bloomberg1] PVC pricing is for general purpose resins; P lastics pricing is through J anuary 1, 2012

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

$40

$60

$80

$100

$120

$140

$160


US$/MMBtu

US$

/bbl

Crude Oil (WTI) Nat. Gas (Henry Hub)

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$400

$600

$800

$1,000

$1,200

$1,400


US$

/lb

US$

/bbl

Palm Oil (Rotterdam) Nat. Rubber (Singapore)

EN ER GY C rude Oi l Nat ural Gas

End o f Month P rice $94.46 $3.35

M oM % Change (1.2%) (5.1%)

YoY % Change (8.5%) 25.5%


3/11


SELECT RECENT TRANSACTIONACTIVITY

Closed

(Announced)

Acquirer

(Parent)

Target

(Seller)Highlights

Pending

(2/14/2013)

RockwoodHoldings, Inc.

Sachtleben ChemieGmbH(Kemira Oyj)

Rockwood agreed to acquire Kemiras remaining 39% stake in Sachtleben Chemthe Germain-based producer of specialty titanium dioxide pigments for the synthfiber, packaging inks, cosmetics and food industries, for $131 million

As previously stated by Rockwood, the titanium dioxide is non-core and transaction allows Rockwood to explore and execute the best strategic option forbusiness

The divestment represents Kemiras focus on implementing its water strategy aalso supports Kemiras restructuring measures

Pending

(2/13/2013)

One Rock CapitalPartners LLC

SummitReheis, Inc.(MVC Capital, Inc.)

One Rock Capital Partners (One Rock) agreed to acquire SummitReheis, Huguenot, NY-based manufacturer of antiperspirant and deodorant active ingredie

Prior to the completion of the transaction, MVC Capital agreed to purchase SumCustom Spray Dying (SCSD), a provider of custom spray dying products to

food, pharmaceutical, and flavorand fragrance industries, fromSummitReheis

SCSD will operate as a stand-alone business following the closing of SummitReheis sale

Pending

(2/12/2013)

Milacron LLC Mold-MastersLimited(3i Group pl c)

Milacron agreed to acquire Mold-Masters, the Canadian-based designer manufacturer of advanced hot runner systems, temperature controllers and auxilequipment for the plastic industry, for $967 million (3.6x2012 sales)

The acquisition provides Milacron with expertise in the high-growth hot-runner maas well as expanded scale, technological leadership, international presence competitive positioning

Mold-Masters generated sales of approximately $268 millionin 2012

Pending

(2/4/2013)

Jab il Ci rcu it Inc . Nyp ro , Inc. J abil Circuit agreed to acquire Nypro, the Clinton, MA-based leader of manufactuprecision plastic consumables and disposables for the healthcare market, for $6

million(0.55x 2012 sales)

The transaction extends J abils materials manufacturing capabilities into healthcare and consumer packaging markets as well as adds depth to J aconsumer electronics business

Nypro generated sales of approximately$1.2 billion in 2012

1/31/2013

(1/31/2013)

Eurecat JointVenture(Albemarle, IFPInvestments)

Tricat Industries Eurecat, a J V between Albemarle and IFP Investments, acquired TricatIndustries

The transaction enhances Eurecats processing capabilities for catalyst regeneratrejuvenation, pre-reclaim burn off, sulfiding, pre-activation and catalyst or additivtoll manufacturing with the addition of two industrial sites located McAlester, Oand Bitterfeld, Germany

Eurecats market capabilities for specialty zeolites and additives will also strengthened with the Tricatacquisition

1/31/2013

(1/31/2013)

TonenGeneralSekiyu

Nippon Unicar JV(Union Carbides50% stake)

TonenGeneral Sekiyu acquired Union Carbides 50% stake in NipponUnicar (NUthe J apan-based polyethylene J V

The transaction will improve NUCs business capability, enabling NUC to respquicklytomarket needs with integrated operations

The J V generated sales of $367 million in 2011

Source: Company Filings, Press Releases, ChemWeek, Capital IQ, Bloomberg


4/11



Closed

(Announced)

Acquirer

(Parent)

Target

(Seller)Highlights

Pending

(1/22/2013)

InternationalForest ProductsLtd.

Wood ProductsBusiness (RayonierInc.)

International Forest Products (IFP) agreed to acquire the assets of RayoniWood Products business, which consists of three lumber mills located in BaxSwainsboro, and Eatonton, GA, for$80million

The transaction supports Rayoniers strategy to fully position its manufactuoperations in the specialty chemicals sector and represents IFPs first purchoutside the NorthwestU.S. and Canada

The three mills generated operating income of approximately$10 million in 2012

Pending

(1/21/2013)

Freeport-McMoRanCopper & GoldInc.; LundinMining

Corporation; LaGenerale desCarrieres et desMines

Cobalt ChemicalRefinery(OM Group, Inc.)

OM Group announced the sale of its cobalt refinery assets in Kokkola, Finland tjoint venture to be held by Freeport-McMoRan Copper & Gold, Lundin MinCorporation, and La Generale des Carrieres et des Mines for total consideration$435 million, of which $325 million is in cash andthe remaining $110 million is baon the business achievingcertain financial objectives over the next three years

The divestiture of the cobalt business is OM Groups final step in exiting its legacommodity business and is consistent with its strategy to move up the value chinto technology-based businesses with attractive growth prospects

Subsequent to close, OM Group expects to have total cash on hand of over $5million, which it expects to deploy to repay a substantial portion of its drepurchase up to $50 million of its shares, and support its strategy of profitaorganic and strategic growth

1/17/2013

(1/17/2013)

The EdgewaterFunds

Kenzoid CompanyLtd. and EldonWater Inc.

The Edgewater Funds (Edgewater) acquired Kenzoid Company and Eldon Wa(collectively Klenzoid), Toronto, Canada-based water treatment chemicals suppand services company

The acquisition is complementary to Edgewaters purchase of Nashville Chemica2011, which will allow both companies to service a broader geographic basecustomers while leveraging scale, procurement, and bestpractices

Edgewater is pursuing additional acquisitions in the following water industry sectwater treatment products, chemicals, services and pipeline infrastructure produand services

1/10/2013

(1/10/2013)

Amtech, LLC(BlackfordCapital)

ArrowheadComposites andThermoplastics,Inc.(Arrowhead PlasticEngineering, Inc.)

Amtech acquired Arrowhead Composites and Thermoplastics (ACT), the ElmAlabama-based fiber-reinforced plastic components manufacturing facilityservingtransportation, recreation, and utility industries

Arrowhead positions Amtech to meet the demand of Amtechs regional productcommitments and provide a newterritory forgrowth

Amtech plans to continue growing its business in the Pacific Northwest andseeking growth opportunities in the Midwest

1/9/2013

(1/9/2013)

Pilot ChemicalCompany

Mason ChemicalCompany

Pilot Chemical Companyacquired Mason Chemical Company, the Arlington HeigIllinois-based leader in the development, registration and sale of quaternammoniumcompounds and relatedchemistries

The acquisition enhances Pilot Chemicals household, industrial and institutiopersonal care and oil and gas product portfolio, strengthening its offering by addregistered and non-registered biocidal quats andtertiaryamine derivatives



5/11



Closed

(Announced)

Acquirer

(Parent)

Target

(Seller)Highlights

1/7/2013

(1/7/2013)

Innospec Inc. Strata ControlServices, Inc.

Innospec acquired Strata Control Services, the Crowley, Louisiana-based suppliemudandfluid loss solutions to oil andgas drillingoperations (~6.0x 2012 EBITDA)

The transaction provides Innospec an increased presence in the expanding oilfspecialties business

Strata Control Services generated sales of approximately$20 million in 2012

Pending

(12/27/2012)

SK CapitalPartners

Textile Chemicals,Paper Specialtiesand EmulsionsBusinesses(Clariant ChemicalsLtd.)

SK Capital Partners acquired the Textile Chemicals, Paper Specialties, aEmulsions businesses of Clariant Chemicals forapproximately $500 million

The acquisition is consistent with SK Capitals strategy of acquiring niche maleaders with strong brands, technologies and underlying growth trends as well aswith SK Capitals priorexperience in the textile, fiber and nylon chemicals sectors

The purchased businesses generate annual sales of approximately $1.3 billion aoperate from25 facilities aroundthe world

12/19/2012

(11/27/2012)

MidOceanPartners

Agi lex Flavo rs &Fragrances Inc.(Nautic Partners,LLC)

MidOcean Partners acquired Agilex Flavors & Fragrances, the P iscataway, NJ ersey-basedproviderof fragrance compounds and delivery systems sold primarilmanufactures of air care, personal care, industrial and institutional and househprodcuts

Agilex maintains production facilities in Georgia, New J ersey, and China along witfragrance laboratory located in Hong Kong



6/11



SELECT RECENT CAPITAL MARKETSACTIVITY

Closed CompanyGross

Offering SizeHighlights

2/21/2013 Ash land Inc. $2.3 bi ll ionSenior Notes

Ashland, the Covington, KY-based specialty chemicals provider, completed a $2.3 billion, fopartoffering

The firstpart consisted of a $600 million,3-yearseniornotes offering ata 3.000% coupon

The second partconsisted of a $700 million, 5-yearseniornotes offering ata 3.875% coupon

The third partconsisted of a $650 million, 9-year seniornotes offering ata 4.750% coupon

The fourthpart consisted of a $350 million, 30-year seniornotes offering ata 6.875% coupon

The proceeds, along with $200 million of revolver borrowings and cash, will be used to pdown the issuers existing termloans

2/13/2013 PolyOneCorp.

$600 SeniorUnsecuredNotes

PolyOne, the Avon Lake, OH-based provider of specialized polymer materials, services asolutions, completed a $600 million, 10-year senior unsecured notes offering at a 5.25coupon

The proceeds will be used to fund a portion of its acquisition of Spartech, to make a $50 milpension contribution and to repayits senior securedtermloan

KeyBanc Capital Markets acted as a Co-Manager on the offering

2/13/2013 Praxair Inc. $900 millionSenior Notes

Praxair, the Danbury, CT-based distributorof process gases, completed a $900 million, two-offering


The second partconsisted of a $500 million, 10-year seniornotes offering ata 2.700% coupo

The proceeds will be used for general corporate purposes, including acquisitions and shrepurchases

2/12/2013 Dupont $2 billionSenior Notes

Dupont, the Wilmington, DE-based science and technology based company, completed a billion, two-part offering

The first partconsisted ofa $1.25 billion, 10-year senior notes offering ata 2.800% coupon

The second partconsisted of a $750 million, 30-year seniornotes offering ata 4.150% coupo

The proceeds, in addition to proceeds fromthe divestiture of its coatings business, will be utopaydown the Companys outstanding commercial paper balances

2/11/2013 Airgas, Inc. $600 mi ll ionSenior Notes

Airgas, the Radnor, PA-based distributer of industrial, medical, and specialty gases, complea $600 million, two-part offering


The second partconsisted of a $275 million, 7-yearseniornotes offering ata 2.375% coupon

The proceeds will be used for general corporate purposes including acquisitions and shrepurchases

1/30/2013 Air Products& Chemicals

Inc.

$400 milli onSenior Notes

Air Products , the Allentown, PA provider of industrial gases, completed a $400 million, 10-yseniornotes offeringata 2.750% coupon

The proceeds will be used forgeneral corporate purposes

1/29/2013 OrionEngineeredCarbonsGmbH

$425 milli onPIK Notes

Orion Engineered Carbons, the German-based manufacturer of carbon black products for tire and rubber industry, completed a $425 million, 6-year P IK notes offering at a 9.25coupon ata priceof 99, yielding 9.460%

The proceeds will be usedto fund a shareholder distribution, withexcess capital via the upsizsimplybolstering the payment


7/11



SELECT RECENT CAPITAL MARKETSACTIVITY

Closed CompanyGross

Offering SizeHighlights

1/24/2013 Trinseo SA $1.325 billionSenior SecuredNotes

Trinseo, the Berwyn, PA-based manufacturer of specialty and customized emulsion polymand plastics, completed a $1.325 billion, 6-yearnotes offering ata 8.75% coupon

The proceeds will be used to pay down existing termdebt

1/17/2013 Axiall Corp . $688 mi ll ionSenior Notes

The Georgia Gulf / PPG Industries combined entity completed a $688 million, 8-year nooffering ata 4.625% coupon

The proceeds are expected to be used to finance the merger of Georgia Gulf and PPCommodityChemicals business

1/17/2013 Georgia GulfCorp

$450 milli onSeniorUnsecured

Notes

Georgia Gulf, the Atlanta, Georgia-based manufacturer of chemicals and building producompleted a $450 million, 10-year notes offering ata 4.875% coupon

The proceeds, along with cash on hand or revolving borrowings, are expected to be used

fund a tender offer for the companys 9% secured notes due 2017

1/16/2013 DuPontPerformanceCoatings

$750 milli onSenior Notes

DuPont Performance Coatings, the German-based manufacturer of surface coating producompleted a $750 million, two-part offering


The second part consisted of a $322 million, 8-year senior secured notes offering at a 5.75coupon

The proceeds will be used to support Carlyle Groups $4.9 billion cash purchase of DuPonPerformance Coatings business

1/16/2013 TPC GroupInc.

$100 milli onSenior SecuredNotes

TPC Group, the Houston, Texas-based producer of value-added products derived fpetrochemical raw materials, complete a $100 million, 7-year senior secured notes offering a8.750% coupon

The proceeds will be used forgeneral corporate purposes, includingstrategic capital projects

1/16/2013 MomentiveSpecialtyChemicals

$1.1 billi onSenior SecuredNotes

Momentive Specialty Chemicals, the Columbus, OH-based manufacturer of specialty chemiand materials, completed a $1.1 billion, 7-year senior secured notes offering at a 6.62coupon ata price of 100.75, yielding6.450%

The proceeds will be used to pay down the $913 million outstanding in termdebt, fund a tenoffer for the $120 millionoutstanding 2006 second-lien notes due 2014


8/11


SPECIALTY CHEMICALS PUBLIC TRADING STATISTICS (Through February 20, 2013)

Source: Capital IQ, Reuters, SEC F ilings

$ in mill ions, except per share data

Stock Market Enterprise LTM EV / LTM Stock Performance (% Change) Consensus EPS Stock Price

Company Price Cap. Value EBITDA EBITDA 1 month 1 year YTD 2013E 2014E 2013E 2

H.B. Fuller Company FUL $40.47 $2,010 $2,334 $220 10.6x 2.4% 31.1% 16.2% $2.63 $3.13 15.4x

PPG Industries , Inc. PPG $131.51 $20,266 $22,527 $2,340 9.6x (7.9%) 42.8% (2.8%) $7.82 $8.95 16.8x

RPM International Inc. RPM $29.96 $3,965 $5,158 $464 11.1x (6.3%) 18.0% 2.0% $1.95 $2.19 15.4x

Sherwin-Williams Company SHW $159.33 $16,428 $17,342 $1,199 14.5x (2.9%) 58.8% 3.6% $7.87 $9.35 20.2x

Valspar Corporation VAL $60.73 $5,462 $6,483 $605 10.7x (9.4%) 31.7% (2.7%) $3.84 $4.48 15.8x

Average 11.3x (4.8%) 36.5% 3.3% 16.7x

Median 10.7x (6.3%) 31.7% 2.0% 15.8x

A. Schulman, Inc. SHLM $30.79 $903 $1,026 $126 8.1x (3.2%) 15.1% 6.4% $2.23 $2.58 13.8x

Albemarle Corporation ALB $64.06 $5,691 $6,011 $609 9.9x (0.6%) (3.3%) 3.1% $5.07 $5.72 12.6x

Cytec Indus tries Inc. CYT $72.01 $3,283 $2,666 $270 9.9x (2.3%) 25.0% 4.6% $4.85 $5.76 14.9x

Ferro Corporation FOE $5.31 $460 $783 $90 8.7x 15.7% (24.9%) 27.0% $0.07 $0.27 NM

Hexcel Corporation HXL $27.20 $2,730 $2,954 $292 10.1x (2.3%) 5.6% 0.9% $1.76 $2.00 15.5x

Innospec Inc. IOSP $40.23 $939 $941 $115 8.2x 1.0% 33.2% 16.6% $3.57 $3.88 11.3x

Kraton Performance Polymers, Inc. KRA $26.00 $839 $1,085 $94 11.5x (0.9%) (11.7%) 8.2% $2.48 $2.55 10.5x

Minerals Technologies Inc. MTX $40.77 $1,443 $1,090 $160 6.8x (1.3%) 22.4% 2.1% $2.27 $2.51 18.0x NewMarket Corporation NEU $246.65 $3,310 $3,686 $408 9.0x (12.9%) 31.1% (5.9%) $18.59 $19.94 13.3x

PolyOne Corporation POL $22.05 $1,974 $2,473 $285 8.7x (1.8%) 49.0% 8.0% $1.34 $1.80 16.4x

Spartech Corporation SEH $9.56 $298 $432 $56 7.7x (1.3%) 49.1% 5.4% $0.31 $0.62 30.8x

Stepan Company SCL $62.29 $1,295 $1,369 $179 7.6x 8.3% 44.3% 12.2% $4.46 $4.79 14.0x

W.R. Grace & Co. GRA $71.00 $5,365 $5,134 $609 8.4x (0.2%) 26.7% 5.6% $4.52 $5.05 15.7x

Average 8.8x (0.1%) 20.1% 7.3% 15.6x

Median 8.7x (1.3%) 25.0% 5.6% 14.4x

American Vanguard Corp. AVD $32.02 $898 $929 $68 13.6x 1.2% 92.1% 3.1% $1.23 $1.62 25.9x

Ashland Inc. ASH $77.60 $6,129 $9,251 $1,359 6.8x (8.7%) 19.8% (3.5%) $7.76 $9.03 10.0x

Cabot Corporation CBT $37.61 $2,399 $3,939 $488 8.1x (11.6%) (8.3%) (5.5%) $3.55 NA 10.6x

Celanes e Corporation CE $47.50 $7,583 $9,692 $1,209 8.0x 0.6% (8.5%) 6.7% $4.31 $5.02 11.0x

Chemtura Corporation CHMT $22.75 $2,223 $2,797 $382 7.3x (5.4%) 55.7% 7.0% $1.47 $1.81 15.5x

Eastman Chemical Co. EMN $70.22 $10,769 $15,517 $1,663 9.3x (1.4%) 28.6% 3.2% $6.42 $7.14 10.9x

FMC Corp. FMC $58.23 $8,017 $8,905 $823 10.8x (3.9%) 20.5% (0.5%) $3.94 $4.53 14.8x

Huntsman Corporation HUN $16.83 $4,037 $7,479 $1,362 5.5x (4.2%) 22.0% 5.8% $1.72 $2.29 9.8x Innophos Holdings Inc. IPHS $46.73 $1,015 $1,164 $152 7.6x (9.2%) (6.5%) 0.5% $3.67 $4.36 12.7x

Koppers Holdings Inc. KOP $41.09 $846 $1,093 $158 6.9x 1.0% 7.0% 7.7% $3.67 $4.21 11.2x

Olin Corp. OLN $22.66 $1,817 $2,441 $378 6.5x (0.6%) 6.1% 5.0% $2.12 $2.20 10.7x

OM Group, Inc. OMG $26.20 $848 $1,126 $143 7.8x 13.0% (15.1%) 18.0% $1.31 $2.00 20.0x

OMNOVA Solutions Inc. OMN $8.08 $379 $688 $104 6.6x 6.0% 47.2% 15.3% $0.69 $0.95 11.7x

Quaker Chemical Corporation KWR $56.83 $743 $761 $76 10.0x (3.4%) 30.8% 5.5% $3.33 $3.73 17.1x

Rockwood Holdings , Inc. ROC $58.99 $4,629 $6,360 $764 8.3x 10.2% 7.5% 19.3% $3.85 $4.86 15.3x

Westlake Chemical Corporation WLK $87.05 $5,806 $5,655 $760 7.4x 0.5% 43.9% 9.8% $6.33 $6.93 13.7x

Zep Inc. ZEP $14.59 $327 $575 $58 9.9x 0.2% (11.7%) 1.0% $1.24 $1.51 11.8x

Average 8.3x (0.9%) 19.5% 5.8% 13.7x

Median 7.8x (0.6%) 19.8% 5.5% 11.8x

Balchem Corp. BCPC $37.43 $1,099 $952 $69 13.7x 0.3% 3.5% 2.7% $1.48 $1.95 25.2x

International Flavors & Fragrances Inc. IFF $72.44 $5,909 $6,615 $565 11.7x 2.7% 27.9% 8.9% $4.39 $4.83 16.5x

Sensient Technologies Corp. SXT $36.80 $1,831 $2,150 $240 9.0x (3.2%) (4.4%) 3.5% $2.67 $2.99 13.8x

Sigma-Aldrich Corporation S IAL $76.38 $9,200 $9,132 $809 11.3x (0.7%) 6.1% 3.8% $4.16 $4.46 18.4x

Average 11.4x (0.2%) 8.3% 4.7% 18.5x

Median 11.5x (0.2%) 4.8% 3.6% 17.4x

Overall Average 9.2x (1.1%) 20.7% 5.8% 15.2x

Overall Median 8.7x (1.3%) 22.0% 5.0% 14.8x

S&P 500 1,511.95 1.7% 11.1% 6.0%

Ticker

Adhesives,Sealants

&

Coatings

AdvancedMaterials,Polymers

&

Additives

FineCh

emicals

Diversified


9/11


SPECIALTY CHEMICALS PUBLIC TRADING STATISTICS (Through February 20, 2013)

Source: Capital IQ, Standard & Poors, SEC Filings

$ in millions

Total Net Total Debt / Net Debt / Total Debt / LTM EBITDA / LT S

Company Ticker Debt Debt LTM EBITDA LTM EBITDA LTM EBITDA Capital Interest RatH.B. Fuller Company FUL $520 $320 $220 2.4x 1.5x 39.9% 11.1x BB

PPG Industries, Inc. PPG $4,001 $1,990 $2,340 1.7x 0.9x 49.2% 11.1x BB

RPM International Inc. RPM $1,426 $1,043 $464 3.1x 2.2x 50.6% 6.2x BB

Sherwin-Williams Company SHW $969 $914 $1,199 0.8x 0.8x 35.3% 28.0x A

Valspar Corporation VAL $1,270 $1,021 $605 2.1x 1.7x 51.3% 8.9x BB

Average 2.0x 1.4x 45.3% 13.1x

Median 2.1x 1.5x 49.2% 11.1x

A. Schulman, Inc. SHLM $223 $116 $126 1.8x 0.9x 29.9% 15.7x -

Albemarle Corporation ALB $699 $222 $609 1.1x 0.4x 26.6% 18.6x BB

Cytec Industries Inc. CYT $707 $527 $270 2.6x 2.0x 28.1% 9.0x BB

Ferro Corporation FOE $337 $312 $90 3.8x 3.5x 55.2% 3.2x B+

Hexcel Corporation HXL $257 $224 $292 0.9x 0.8x 20.5% 29.2x BB

Innospec Inc. IOSP $30 $3 $115 0.3x NM 8.6% NM NR

Kraton Performance Polymers, Inc. KRA $448 $246 $94 4.8x 2.6x 45.7% 3.4x BB-

Minerals Technologies Inc. MTX $93 ($376) $160 0.6x NM 10.2% NM -NewMarket Corporation NEU $465 $376 $408 1.1x 0.9x 53.6% 25.2x BB

PolyOne Corporation POL $707 $497 $285 2.5x 1.7x 52.8% 5.5x BB-

Spartech Corporation SEH $135 $134 $56 2.4x 2.4x 42.8% 4.7x -

Stepan Company SCL $150 $73 $179 0.8x 0.4x 23.7% 18.7x -

W.R. Grace & Co. GRA $1,096 ($241) $609 1.8x NM 77.5% 13.1x NR

Average 1.9x 1.6x 36.6% 13.3x

Median 1.8x 1.3x 29.9% 13.1x

American Vanguard Corp. AVD $54 $30 $68 0.8x 0.4x 20.1% 25.1x -

Ashland Inc. ASH $3,610 $3,122 $1,359 2.7x 2.3x 46.5% 6.6x BB

Cabot Corporation CBT $1,501 $1,409 $488 3.1x 2.9x 43.3% 9.4x BB

Celanese Corporation CE $3,121 $2,109 $1,209 2.6x 1.7x 64.3% 6.5x -

Chemtura Corporation CHMT $754 $567 $382 2.0x 1.5x 39.9% 6.2x BB-

Eastman Chemical Co. EMN $4,985 $4,748 $1,663 3.0x 2.9x 62.4% 11.6x BB

FMC Corp. FMC $965 $888 $823 1.2x 1.1x 38.3% 18.2x A-

Huntsman Corporation HUN $3,706 $3,319 $1,362 2.7x 2.4x 66.2% 6.0x BBInnophos Holdings Inc. IPHS $176 $149 $152 1.2x 1.0x 28.4% 25.5x -

Koppers Holdings Inc. KOP $296 $229 $158 1.9x 1.5x 63.8% 5.6x BB-

Olin Corp. OLN $714 $549 $378 1.9x 1.4x 41.7% 14.3x BB

OM Group, Inc. OMG $467 $240 $143 3.3x 1.7x 27.3% 2.7x BB-

OMNOVA Solutions Inc. OMN $452 $309 $104 4.3x 3.0x 77.6% 2.9x B

Quaker Chemical Corporation KWR $39 $8 $76 0.5x 0.1x 11.9% 17.1x -

Rockwood Holdings, Inc. ROC $2,752 $1,478 $764 3.6x 1.9x 59.0% 8.8x -

Westlake Chemical Corporation WLK $764 ($151) $760 1.0x NM 29.0% 17.7x BB

Zep Inc. ZEP $253 $249 $58 4.4x 4.3x 59.5% 9.2x -

Average 2.4x 1.9x 45.8% 11.4x

Median 2.6x 1.7x 43.3% 9.2x

Balchem Corp. BCPC $0 ($145) $69 NM NM 0.0% NM -

International Flavors & Fragrances Inc. IFF $1,031 $707 $565 1.8x 1.3x 45.2% 13.5x BB

Sensient Technologies Corp. SXT $334 $319 $240 1.4x 1.3x 22.4% 14.2x NR

Sigma-Aldrich Corporation SIAL $683 ($68) $809 0.8x NM 21.2% NM A+

Average 1.4x 1.3x 22.2% 13.9x

Median 1.4x 1.3x 21.8% 13.9x

Overall Average 2.1x 1.7x 40.2% 12.4x

Overall Median 1.9x 1.5x 41.7% 11.1x

Adhesives,Sealants

&

Coatings

FineCh

emicals

AdvancedMaterials,Polymers

&

Additives

Diversified


10/11

Specialty Chemicals Monthly

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

8.0x

9.0x

10.0x

Feb-08 Aug-08 Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Aug-12 Feb-13

(80%)

(60%)

(40%)

(20%)

0%

20%

40%

60%

80%

100%

120%

Feb-08 Aug-08 Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Aug-12 Feb-13

KBCM Specialty

Chemicals IndexS&P 500

Last 12 Months 20.7% 11.1%

Last 3 Months 15.6% 8.7%

Last 1 Month (1.1%) 1.7%

February 2013

SPECIALTY CHEMICALS VALUATIONS (Through February 20, 2013)

5-Year Index Performance

KBCMs Specialty Chemicals Index traded down (1.1%) for the month ended February20th

, versus a 1.7% increase in theS&P 500

88.7%

11.2%

5-Year Enterpr ise Value / LTM EBITDA Valuations

KBCM Specialty Chemicals Index valuations increased to 9.0x EV / LTM EBITDA as of February 20th

Average: 7.4X

Source: Capital IQ, SEC FilingsNote: KBCM Specialty Chemicals Index includes: ALB, ASH, AVD, BCPC, CBT, CE, CHMT, CYT, EMN, FMC, FOE, FUL, HUN, HXL, IFF, IOSP, IPHS,KOP, KRA, KWR, MTX, NEU, OLN, OMG, OMN, POL, PPG, ROC, RPM, SCL, SEH, SHLM, SHW, SIAL, SXT, VAL, WLK, ZEP


11/11


SELECT KEYBANC CAPITAL MARKETS TRANSACTION EXPERIENCE

Client Business DescriptionDeal Value

($ mm) Type Clo

PolyOne Corp.

Specialized polymer materials, services,

and solutions $600 Co-Manager Senior Notes Fe

DuBois Chemicals(Aurora Capital)

Manufactures metalworking fluids,cleaners, and paper chemicals

$150Joint Lead Arranger, Joint Bookrunner &

Documentation Agent Senior Credit FacilityDe

DuBois Chemicals(Aurora Capital)


ND Co-Buy-Side Advisor De

NewMarketCorp. Manufactures petroleum additives $350 Co-Manager Senior Notes De

Sherwin-Williams Paints,coatings and related products $1,000 Co-Manager Senior Notes De

GEO Specialty ChemicalsManufactures paints, coating products,and polyester diols

$120 Syndication Agent Senior Credit Facility No

American PacificManufactures fine and specialtychemicals

$85Joint Lead Arranger, Sole Bookrunner &

Admi nis trat ive Agent Senio r Secu red Cr edit Facil ityOc

Sherwin-Williams Paints,coatings and related products C$75Joint Lead Arranger, Sole Bookrunner &

Admi nis trat ive Agent Senio r Secu red Cr edit Facil ityJ u

RPM International

Industrial and consumer specialty

chemical products $600

Joint Lead Arranger, Joint Bookrunner & Co-

Syndication Agent Senior Unsecured Credit Facility J u

DuBois Chemicals(The Riverside Company)


$114Sole Lead Arranger, Sole Bookrunner &

Admi nis trat ive Agent Senio r Secu red Cr edit Facil ityAp

Citadel Plastics Holding(WindPoint Partners)

Global compounder of thermoplastic andthermoset resins

ND Sell-Side Advisor Fe

Citadel Plastics Holding(Huntsman Gay Global Capital)

Global compounder of thermoplastic andthermoset resins

$185Joint Lead Arranger, Joint Bookrunner & Syndication

Agent Senio r Secur ed Cred it Fac ili tyFe

Arizona Chemical Company(American Securities)

Manufactures naturally derived specialtyresins and pine-based chemicals

$610 Co-Agent De

PolyOne Corp.Specialized polymer materials, services,and solutions

$300 Documentation Agent Revolving Credit Facility De

Stepan CompanyProducer of specialtyand intermediatechemicals

$65 Sole Lead Placement Agent No

Quaker Chemical CorporationGlobal developer and provider of highperformance specialty chemical products

$45 Co-Manager Follow-on Offering Ma

Kraton P erformance P olymers

(CCMP & TPG)

Styrenic block copolymers for use in

industrial and consumer applications $377 Co-Manager Follow-on Offering Ma

GenTekInc.(American Securities)

Manufactures industrial components andperformance chemicals

$425 Syndication Agent Senior Credit Facility Ma

Cornerstone Chemical Company(H.I.G. Capital)

Manufactures key intermediate chemicalcriticals

$120 Joint Lead Arranger Senior Secured Credit Facility Ma

Flow Polymers Inc.Manufactures rubberprocessingchemicals for a variety of applications

ND Sell-Side Advisor De

OMNOVA Solutions, Inc.Emulsion polymers, specialty chemicals,and functional surfaces

$250 Lead Manager Senior Notes Oc

Ferro Corp.Electronic and performance materials,porcelain enamel, and polymer additives

$250 Co-Manager Senior Notes Au

Arch Chemicals, Inc.Biocides and specialty chemicalsmanufacturer and supplier

NDSell-Side Advisor Sayerlack Industrial Wood

CoatingsMa

SelectTransactions

SPECIALTY CHEMICALS TEAM CONTACTS

Ben Whiting216.689.4120

[email protected]

For additional information on KeyBanc Capital Markets Specialty Chemicals Practice, please contact any of the individuals listed below

Mario Toukan216.689.4663

[email protected]

Key Tower, Floor 6 127 Public Square Cleveland, OH 44114

Keybanc CM_Chemicals Update

Documents