Merck KGaA · XETR:MRK
Merck KGaA — Merck KGaA, Darmstadt, Germany — Merger or Acquisition (April 2019)
20 slides from Merck KGaA's merger presentation, Apr 12, 2019
Slide 1: Acquisition of Versum Materials
ACQUISITION OF VERSUM MATERIALS Merck KGaA, Darmstadt, Germany Marcus Kuhnert, CFO April 12, 2019
Slide 2: Disclaimer
Disclaimer Publication of Merck KGaA, Darmstadt, Germany. In the United States and Canada the group of companies affiliated with Merck KGaA, Darmstadt, Germany operates under individual business names (EMD Serono, Millipore Sigma, EMD Performance Materials). To reflect such fact and to avoid any mis
Slide 3: Disclaimer: Cautionary Note Regarding Forward-Looking Statements
Disclaimer Cautionary Note Regarding Forward-Looking Statements and financial indicators This communication may include “forward-looking statements.” Statements that include words such as “anticipate,” “expect,” “should,” “would,” “intend,” “plan,” “project,” “seek,” “believe,” “will,” and other wor
Slide 4: Terms & Valuation, Financing, Regulatory and Shareholder Approvals
Merger agreement signed • All cash proposal at $53 per Versum Materials share recommended by Versum Terms & Materials Board of Directors Valuation 1 2 • €5.8bn Enterprise value, representing a 13.7x 2019E EV/EBITDA multiple 2 and an 11.6x 2019E EV/EBITDA multiple, adjusted for full synergy run-rate
Slide 5: Value creating combination of two highly complementary industry leaders
Value creating combination of two highly complementary industry leaders Rebalancing portfolio • Rebalances portfolio to a diversified structure with three strong business sectors towards high-growth • Drive Performance Materials (PM) growth aspiration in electronic materials and 1 markets double sal
Slide 6: Versum Materials – A leading supplier to the electronics industry
Versum Materials – A leading supplier to the electronics industry 1 3 Sales by region Adjusted EBITDA by segment ▪ Leading global supplier of high-purity FY 2018: €1,162m FY 2018: €377m process chemicals, gases and equipment serving mainly semiconductor manufacturers Delivery Americas Systems & 23%
Slide 7: Combination creates a leading electronic materials player
Combination creates a leading electronic materials player Partner of Poised for Comple- Deep Broadened Innovation choice growth mentary portfolio offering • Creating a leading • Accelerating ability to • Optimally positioned to • Complementary • Build an attractive • Expanding Merck’s electronic mat
Slide 8: The combined business capitalizes on electronics industry growth
The combined business capitalizes on electronics industry growth …driving the digital revolution as semiconductors New markets and applications emerge daily… are required for data processing and storage 1 Size of global data sphere in zettabytes 1 Artificial intelligence 1 Zettabyte = 1 trillion gig
Slide 9: Increased chip complexity and miniaturization will drive accelerated growth
Increased chip complexity and miniaturization will drive accelerated growth for high-performance and high-purity materials Indicative semiconductor industry roadmap 2019 2021 2023 2025+ Trend Logic 7nm 5nm 3nm 2nm ? Miniaturization • Continuous DRAM technological progress drives 28nm 14nm 7nm ? Mini
Slide 10: Combination enables competitive edge as future-critical materials grow in importance
Combination with Versum Materials enables competitive edge, as future- critical materials will become increasingly important 1 Semiconductor market value • Electronics Innovation-critical wafer processing materials materials market is SOI * Deposition driven by innovation Bulk gases materials Photor
Slide 11: Value accretive for shareholders
Value accretive for Merck KGaA, Darmstadt, Germany shareholders Pro- Expected Enhancing sales Value Balance Solid financial forma creation synergies drive sheet and EBITDA pre structure preserved value creation Merck’s KGaA, Darmstadt, Cost synergies of ~€75m p.a. Fully financed with cash and
Slide 12: Transaction offers well-founded cost synergies driving value creation
Transaction offers well-founded cost synergies driving value creation Corporate / • Integrate corporate & administrative Due diligence completed Administrative functions Functions • Save U.S. public company costs ~€75m in annual run-rate cost synergies identified • Optimize production and supply cha
Slide 13: Solid financing structure for Versum Materials acquisition secured
Solid financing structure for Versum Materials acquisition secured Fully committed financing is in place by way of a facilities agreement with Bank of America Merrill Lynch, BNP Paribas Fortis and Deutsche Bank Financing Facilities Agreement consists of a USD 4.0bn Bridge Loan and a USD 2.3bn st
Slide 14: Indicative timeline to closing
Indicative timeline to closing Closing after: Announcement (April 12, 2019) 1 1 Versum Materials shareholders approval 2 Regulatory approvals 3 Fulfillment of other customary closing conditions Closing (Expected H2 2019) 1 14 Day of Versum Materials-EGM to be confirmed.
Slide 15: Executive summary
Executive summary 1 Rebalancing group’s and Performance Materials’ portfolio towards high- growth markets 2 Creating a leading electronic materials players focused on the semiconductor and display industries 3 Capitalizing on attractive secular electronics industry growth trends 4 EPS pre accretive
Slide 16: Back-up
BACK-UP
Slide 17: A compelling proposal for all stakeholders
A compelling proposal for all stakeholders Providing leading-edge technology backed A strategically and financially compelling by the capabilities, scale and quality of transaction for Merck KGaA, Darmstadt, Merck KGaA, Darmstadt, Germany Germany shareholders Truly global footprint and close Deliver
Slide 18: Actively rebalances the Group portfolio for diversified, accelerated growth
Actively rebalances the Group portfolio for diversified, accelerated growth Rebalancing Group portfolio to diversified Performance Materials executes on its structure of three strong pillars transformation program Merck KGaA, Darmstadt, Germany 1 3 4 Net sales 1 Pro-forma net sales Today Pro-forma 1
Slide 19: Robust historical financial performance
Versum Materials Financials €m1, 2 2015 2016 2017 2018 Robust historical Net sales 907 880 997 1,162 financial performance Adjusted EBITDA 271 297 329 377 Adjusted EBITDA margin 29.9% 33.7% 33.0% 32.5% • 2015-2018 CAGR sales of ~11% EBITDA 251 296 307 360 • 2015-2018 CAGR D&A 51 46 41 43 adjusted EB
Slide 20: Investor Relations contacts
CONSTANTIN FEST SVENJA BUNDSCHUH ALESSANDRA HEINZ Head of Investor Relations Assistant Investor Relations Assistant Investor Relations +49 6151 72-5271 +49 6151 72-3744 +49 6151 72-3321 [email protected] [email protected] [email protected] ANNETT WEBER AMELIE SCHRA
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