Grace Responds to Revised Unsolicited Proposal from 40 North
January 15 2021 - 2:00PM
W. R. Grace & Co. (NYSE: GRA) today announced that it has sent
a letter to 40 North Management LLC (“40 North”) in response to 40
North’s January 11, 2021 revised unsolicited proposal to acquire
Grace for $65 per share in cash.
Following is the full text of the letter that was sent on
January 15, 2021:
January 15, 2021
David Winter and David Millstone40 North Management LLC9 West
57th Street, 47th Fl.New York, NY 10019
David and David –
I am writing on behalf of the Grace Board of Directors in
response to your letter and revised proposal of January 11,
2021.
Our Board of Directors has met and discussed your revised
proposal. We are willing to discuss a sale of Grace to 40 North in
the context of our ongoing review of strategic alternatives. Any
transaction would need to be at a price level that reflects the
full value of Grace for its shareholders.
Grace’s opportunities for continued growth and value creation
are strong, particularly as our end markets recover from the
disproportionate displacement resulting from the COVID-19 pandemic.
As we disclosed when we announced our third quarter 2020 results,
we have experienced a rapid recovery from the pandemic and expect
fourth quarter 2020 sales and gross margin to approach pre-pandemic
levels, with adjusted free cash flow nearing 2019 levels as well.
Based on our recent growth investments and operating plan, we are
confident in our robust opportunities for continued growth and high
profitability. Grace is well positioned to emerge from this crisis
even more successful than before.
Grace’s market-leading positions, advanced technologies,
value-selling capabilities, and capital allocation discipline
underpin our confidence in the Company’s ability to generate
substantial value as a standalone company or in a business
combination.
As a next step, we would be willing to share with you, under
customary and appropriate confidentiality arrangements, information
that would support a full valuation of Grace. We are prepared to
move quickly to provide you with a draft confidentiality agreement,
if you are interested.
Sincerely,
/s/ Hudson La ForceHudson La ForcePresident and Chief Executive
Officer
Goldman Sachs & Co. LLC and Moelis & Company LLC are
serving as financial advisors and Wachtell, Lipton, Rosen &
Katz is serving as legal counsel to Grace.
About GraceBuilt on talent, technology, and
trust, Grace is a leading global specialty chemical company. The
company’s two industry-leading business segments—Catalysts
Technologies and Materials Technologies—provide innovative
products, technologies, and services that enhance the products and
processes of our customers around the world. With approximately
4,000 employees, Grace operates and/or sells to customers in over
60 countries. More information about Grace is available at
grace.com.
Forward-Looking Statements
This announcement contains forward-looking statements, that is,
information related to future, not past, events. Such statements
generally include the words “believes,” “plans,” “intends,”
“targets,” “will,” “expects,” “suggests,” “anticipates,” “outlook,”
“continues,” or similar expressions. Forward-looking statements
include, without limitation, statements regarding future: financial
positions; results of operations; cash flows; financing plans;
business strategy; operating plans; capital and other expenditures;
impact of COVID-19 on Grace’s business; competitive positions;
growth opportunities for existing products; benefits from new
technology; benefits from cost reduction initiatives; succession
planning; and markets for securities. For these statements, Grace
claims the protections of the safe harbor for forward-looking
statements contained in Section 27A of the Securities Act and
Section 21E of the Exchange Act. Grace is subject to risks and
uncertainties that could cause actual results or events to differ
materially from its projections or that could cause forward-looking
statements to prove incorrect. Factors that could cause actual
results or events to differ materially from those contained in the
forward-looking statements include, without limitation: risks
related to foreign operations, especially in areas of active
conflicts and in emerging regions; the costs and availability of
raw materials, energy, and transportation; the effectiveness of
Grace’s research and development and growth investments;
acquisitions and divestitures of assets and businesses;
developments affecting Grace’s outstanding indebtedness;
developments affecting Grace’s pension obligations; legacy matters
(including product, environmental, and other legacy liabilities)
relating to past activities of Grace; its legal and environmental
proceedings; environmental compliance costs (including existing and
potential laws and regulations pertaining to climate change); the
inability to establish or maintain certain business relationships;
the inability to hire or retain key personnel; natural disasters
such as storms and floods; fires and force majeure events; the
economics of our customers’ industries, including the petroleum
refining, petrochemicals, and plastics industries, and shifting
consumer preferences; public health and safety concerns, including
pandemics and quarantines; changes in tax laws and regulations;
international trade disputes, tariffs, and sanctions; the potential
effects of cyberattacks; and those additional factors set forth in
Grace’s most recent Annual Report on Form 10-K, quarterly reports
on Form 10-Q, and current reports on Form 8-K, which have been
filed with the Securities and Exchange Commission and are readily
available on the internet at www.sec.gov. Grace’s reported results
should not be considered as an indication of its future
performance. Readers are cautioned not to place undue reliance on
Grace’s projections and other forward-looking statements, which
speak only as of the dates those projections and statements are
made. Grace undertakes no obligation to release publicly any
revisions to any projections or other forward-looking statements
contained in this announcement, or to update them to reflect events
or circumstances occurring after the date of this announcement.
Media RelationsJamie Moser / Jim Golden / Scott
BisangJoele Frank, Wilkinson Brimmer Katcher+1 212.355.4449 |
Investor RelationsJason Hershiser+1
410.531.8835jason.hershiser@grace.com |
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