- Enables New Sealed Air and New Diversey
to better leverage global leadership positions and capitalize on
focused investments within their respective industries
- Dr. Ilham Kadri to be named CEO of the
spin-off company
- Expected to be completed in the second
half of 2017
Sealed Air Corporation (NYSE:SEE) announced today a plan to
pursue the spin-off of its Diversey Care division and the food
hygiene and cleaning business within its Food Care division
(together “New Diversey”), while the remaining Sealed Air business
(“New Sealed Air”) will continue as an independent public company.
Under the plan, if effectuated, Sealed Air’s shareholders would own
100% of the common stock of New Diversey following completion of
the spin-off. The plan is intended to allow each of New Sealed Air
and New Diversey to focus on a distinct set of strategic
objectives, creating enhanced shareholder value. The transaction is
expected to be completed in the second half of 2017 and is intended
to qualify as a tax-free distribution to Sealed Air shareholders
for U.S. federal income tax purposes. Upon completion of the
spin-off:
- New Sealed Air will continue to be a
leading provider of food, product and medical packaging solutions,
with a high-margin and technologically advanced business focused on
profitable growth and strong cash flow globally. New Sealed Air
will continue delivering leading knowledge-based solutions for
waste reduction, resource conservation and product security, all of
which deliver unique and measurable value to customers and the
planet. On a pro forma basis for the twelve months ended June 30,
2016, New Sealed Air (excluding New Diversey) generated $4.2
billion in sales and had Adjusted EBITDA of $826 million.
- New Diversey, to be led by Dr. Ilham
Kadri, President of Diversey Care, will be a pure-play, high-growth
hygiene and cleaning solutions company. With an integrated product
offering comprised of floor care machines, tools, chemicals and
services, New Diversey is a pioneer in the hygiene industry through
digital innovation and is well-positioned to profitably gain share
on a global basis. On a pro forma basis for the twelve months ended
June 30, 2016, New Diversey generated $2.6 billion in sales and had
Adjusted EBITDA of $305 million.
“Sealed Air has created significant shareholder value by
delivering leading innovations to our global customers, improving
our quality of earnings and executing a disciplined capital
allocation strategy,” said Jerome A. Peribere, Sealed Air’s
President and Chief Executive Officer. “Our Board and management
team continually evaluate options to enhance shareholder value and
we believe this spin-off will allow both New Sealed Air and New
Diversey to realize their full potential. Following the spin-off,
each company will be well-positioned for profitable growth through
a proven business model and enhanced strategic focus, improved
operating efficiencies and optimized capital allocation to enable
investments in new disruptive technologies.”
“Diversey Care is a market leader thanks to its pioneering
approach in the development of innovative solutions that create
value for customers, including the Internet of Clean™, Intellibot®
robotics, unmatched plant-based biodegradable chemistries and AHP®
disinfection technologies,” Peribere continued. “Ilham and her
management team have been instrumental in transforming and
positioning Diversey Care for sustainable and profitable
growth.”
Transaction Benefits
- Enhances Strategic Focus. The
spin-off creates two strong, focused operating companies with
distinct business models and growth profiles. As independent
companies, New Sealed Air and New Diversey will be better able to
efficiently allocate capital and optimize investments in disruptive
technologies to serve their unique customer bases and enhance their
competitive positions. New Sealed Air will continue to execute on
its “Change the Game” initiatives to penetrate new markets,
introduce new business models and deliver disruptive innovation to
drive value for customers and partners. New Diversey will continue
to focus on its strategy as an innovator and strong collaborative
partner differentiated by its industry leading expertise in dosing,
dispensing and concentrated formulas, as well as a global footprint
that reaches a diverse customer base.
- Simplifies Operating Structures.
Following the completion of the spin, New Sealed Air and New
Diversey will each benefit from leaner, more streamlined operating
structures to enable more efficient management
decision-making.
- Creates Distinct Investment
Identities. The spin-off enables investors to evaluate each
business based on its respective financial profile, performance and
value creation opportunities.
- New Sealed Air and New Diversey will
Maintain Strong Financial Positions. Each company will be
well-capitalized and well-positioned to pursue future growth
opportunities. New Sealed Air and New Diversey will have
disciplined returns-based approaches to capital allocation and are
targeting similar leverage ratios and credit ratings as existing
Sealed Air.
Leadership
Dr. Ilham Kadri, President of Diversey Care, joined Sealed Air
in 2013 from Dow Chemical. She brings more than 20 years of
experience through a variety of global roles in Business
Leadership, Strategic Planning, Sales, Marketing, Product
Management, M&A and Research & Development in public and
private companies such as Shell Chemicals-Basell, UCB-Cytec,
Huntsman, and Rohm Haas-Dow.
Additional members of New Diversey’s management team and Board
of Directors will be named in the months leading up to the
completion of the spin-off.
New Sealed Air will continue to be led by its existing
management team under Jerome A. Peribere, President and Chief
Executive Officer.
Transaction Conditions and Terms
The transaction is expected to be completed in the second half
of 2017, subject to final approval by Sealed Air’s Board of
Directors, as well as satisfaction of customary conditions,
including the effectiveness of appropriate filings with the U.S.
Securities and Exchange Commission. The Board has made no final
decision regarding a spin-off of New Diversey, and there can be no
assurance that the Board’s plan will result in the commencement or
consummation of any such spin-off.
Sealed Air anticipates filing a Form 10 relating to the
transaction with the Securities and Exchange Commission as early as
the first quarter of 2017.
The Company intends the spin-off to be tax-free for U.S. federal
income tax purposes. In anticipation of and to facilitate the
spin-off, the Company is planning the internal separation of the
New Diversey business lines from the remaining Sealed Air business
in a series of transactions that are intended to be tax efficient
from both a United States and foreign perspective. Such separation
is currently expected to include internal distributions intended to
be tax-free under Section 355 of the U.S. Internal Revenue Code. In
particular, the companies (which shall also include any of their
successors and transferees) that are anticipated to be distributing
corporations in connection with the internal separation
transactions include Ciras C.V., Cryovac, Inc., Cryovac
International Holdings Inc., Diversey Brasil Indústria Quimica
Ltda., Diversey Canada, Inc., Diversey Eastern and Central Africa
Limited, Diversey Egypt Limited, Diversey Egypt One, Limited,
Diversey Egypt Trading Company, S.A.E., Diversey Egypt Two,
Limited, Diversey Europe Holdings C.V., Diversey Europe Investments
B.V., Diversey Global Holdings C.V., Diversey Gulf FZE, Diversey
Hygiene (Thailand) Co., Ltd., Diversey, Inc., Diversey Kimya Sanayi
ve Ticaret A.S., Diversey Maroc S.A., Diversey Perú, S.A.C.,
Diversey Sverige AB, Diversey West Africa Limited, JWP Investments
Offshore, Inc., PT Diversey Indonesia, Sealed Air Africa
(Proprietary) Limited, Sealed Air (Asia) Holdings B.V., Sealed Air
(Barbados) S.R.L., Sealed Air Central America, S.A., Sealed Air
(China) Co., Ltd., Sealed Air Colombia Ltda., Sealed Air
Corporation (US), Sealed Air Europe Holdings LP, Sealed Air
Holdings (Pty) Ltd., Sealed Air Holdings South Africa Proprietary
Limited, Sealed Air Hong Kong Trading Limited, Sealed Air (India)
Private Limited, Sealed Air Luxembourg (I) S.a.r.l., Sealed Air
Luxembourg (II) S.a.r.l., Sealed Air Saudi Arabia Limited, Sealed
Air (Singapore) Pte. Ltd., Sealed Air Solutions Holdings, Inc.,
Sealed Air (Thailand) Limited, and Sealed Air Uruguay S.A.
Advisors
The Company has retained Citi as its financial advisor and
Skadden, Arps, Slate, Meagher & Flom LLP as its legal
advisor.
SC Johnson & Son Brand License
Separately, Sealed Air announced today that its Diversey Care
division has reached a mutual agreement with SC Johnson & Son
(“SCJ”) to end the existing business relating to Sealed Air’s
distribution of SCJ-branded products to the professional market
under the existing Brand License Agreement (“BLA”). The companies
agreed that the BLA will expire on May 2, 2017, with the exception
of Australia, New Zealand, Argentina, Chile, Czech Republic and
Poland, where the BLA expires on January 1, 2017. Both companies
are committed to maintaining a continuous supply of SCJ-branded
products to customers under the BLA.
New Diversey will be well-positioned to expand its relationships
with existing partners, develop new partnerships and grow its own
brands into new channels in the U.S. and globally.
Third Quarter Conference Call
Sealed Air has scheduled a conference call and webcast to
discuss its third quarter results and the spin-off at 11:00 a.m.
(ET) on Thursday, October 27, 2016.
The conference call will be webcast live on the Investor
Relations home page at www.sealedair.com/investors. Listeners
should go to the web site prior to the call to register and to
download and install any necessary audio software. A replay of the
webcast will also be available thereafter.
Investors who cannot access the webcast may listen to the
conference call live via telephone by dialing (888) 680-0878
(domestic) or (617) 213-4855 (international) and use the
participant code 72265248. To avoid registration wait times,
teleconference participants may pre-register on the Investor
Relations home page for a personalized PIN number to access the
conference call. Telephonic replay of the webcast will be available
starting at 3:00 p.m. (ET) on Thursday, October 27, 2016 and end on
Saturday, November 26, 2016 at 2:59 p.m. (ET). To listen to the
replay, please dial (888) 286-8010 (domestic) or (617) 801-6888
(international) and use the confirmation code 19315392.
Business
Sealed Air Corporation creates a world that feels, tastes and
works better. In 2015, the Company generated revenue of
approximately $7.0 billion by helping our customers achieve their
sustainability goals in the face of today’s biggest social and
environmental challenges. Our portfolio of widely recognized
brands, including Cryovac® brand food packaging solutions, Bubble
Wrap® brand cushioning and Diversey® cleaning and hygiene
solutions, enables a safer and less wasteful food supply chain,
protects valuable goods shipped around the world, and improves
health through clean environments. Sealed Air has approximately
23,000 employees who serve customers in 169 countries. To learn
more, visit www.sealedair.com.
Website Information
We routinely post important information for investors on our
website, www.sealedair.com, in the "Investor Relations"
section. We use this website as a means of disclosing material,
non-public information and for complying with our disclosure
obligations under Regulation FD. Accordingly, investors should
monitor the Investor Relations section of our website, in addition
to following our press releases, SEC filings, public conference
calls, presentations and webcasts. The information contained on, or
that may be accessed through, our website is not incorporated by
reference into, and is not a part of, this document.
Non-U.S. GAAP
Information
In this press release, we have referenced the non-U.S. GAAP
financial measure, Adjusted EBITDA. We present results adjusted to
exclude the effects of certain specified items (“special items”)
that would otherwise be included under U.S. GAAP. Non-U.S. GAAP
measures are used by management to review and analyze our operating
performance and, along with other data, as internal measures for
setting annual budgets and forecasts, assessing financial
performance, providing guidance and comparing our financial
performance with our peers and may also be used for purposes of
determining incentive compensation. Adjusted EBITDA has limitations
as an analytical tool and should not be considered in isolation
from or as a substitute for U.S. GAAP information. It does not
purport to represent any similarly titled U.S. GAAP information and
is not an indicator of our performance under U.S. GAAP. Adjusted
EBITDA as determined by us may not be comparable with similarly
titled measures used by others. Investors are cautioned against
placing undue reliance on these non-U.S. GAAP measures. For a
reconciliation of Adjusted EBITDA to Operating Profit, see the
attached supplementary schedule entitled “Summary Financial
Data.”
Forward-Looking
Statements
This press release contains “forward-looking statements” within
the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 concerning our business, consolidated
financial condition and results of operations. Forward-looking
statements are subject to risks and uncertainties, many of which
are outside our control, which could cause actual results to differ
materially from these statements. Therefore, you should not rely on
any of these forward-looking statements. Forward-looking statements
can be identified by such words as “anticipates,” “believes,”
“plan,” “assumes,” “could,” “should,” “estimates,” “expects,”
“intends,” “potential,” “seek,” “predict,” “may,” “will” and
similar references to future periods. All statements other than
statements of historical facts included in this press release
regarding our strategies, prospects, financial condition,
operations, costs, plans and objectives are forward-looking
statements. Examples of forward-looking statements include, among
others, statements we make regarding expected future operating
results, expectations regarding the results of restructuring and
other programs, anticipated levels of capital expenditures and
expectations of the effect on our financial condition of claims,
litigation, environmental costs, contingent liabilities and
governmental and regulatory investigations and proceedings. The
following are important factors that we believe could cause actual
results to differ materially from those in our forward-looking
statements: the tax benefits associated with the Settlement
agreement (as defined in our 2015 Annual Report on Form 10-K),
global economic and political conditions, changes in our credit
ratings, changes in raw material pricing and availability, changes
in energy costs, competitive conditions, success of our
restructuring activities, currency translation and devaluation
effects, the success of our financial growth, profitability, cash
generation and manufacturing strategies and our cost reduction and
productivity efforts, the success of new product offerings, the
effects of animal and food-related health issues, pandemics,
consumer preferences, environmental matters, regulatory actions and
legal matters, and the other information referenced in the “Risk
Factors” section appearing in our most recent Annual Report on Form
10-K, as filed with the Securities and Exchange Commission, and as
revised and updated by our Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K. Any forward-looking statement made by
us is based only on information currently available to us and
speaks only as of the date on which it is made. We undertake no
obligation to publicly update any forward-looking statement,
whether written or oral, that may be made from time to time,
whether as a result of new information, future developments or
otherwise.
Sealed Air Corporation
Spin-off of Diversey Care and Related
Hygiene Business
Summary Financial Data
Sealed Air New Diversey New Sealed Air
Twelve Months Twelve Months Twelve Months
Ended Ended Ended (In millions) June
30, 2016 June 30, 2016 June 30, 2016
Selected
Financial Data
Net sales $ 6,818 $ 2,576
$ 4,242 Operating profit $ 763
$ 189 $ 574 Adjusted EBITDA
(Non-GAAP) $ 1,131 $ 305 $
826
Reconciliation of
Adjusted EBITDA to Operating Profit
Adjusted EBITDA $ 1,131
(1)
$ 305
(2)
$ 826
(1)
Depreciation and amortization (269 ) (117 ) (152 ) Other income,
net (12 ) 1 (13 ) Special items:
- Restructuring expense (50
) - (50 ) Other restructuring associated costs (35 ) - (35 ) Other
special items (2 ) - (2 )
Operating
profit $ 763 $ 189
$ 574 (1) Adjusted EBITDA represents
LTM 6/31/16 results as reported, including Other expenses.
(2) Adjusted EBITDA represents LTM 6/31/16 results as
reported, excluding an allocation of Other expenses.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161017006416/en/
Sealed Air CorporationInvestors:Lori Chaitman,
201-712-7310orMedia:Ken Aurichio, 917-693-5417
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