Tredegar Agrees to Sell Ownership Interest in kaléo
November 29 2021 - 8:00AM
Business Wire
Tredegar Corporation (NYSE:TG, also “Tredegar”) today reported
that its approximate 18% ownership interest in kaleo, Inc (“kaléo”)
is expected to be sold pursuant to an agreement dated November 28,
2021, whereby Marathon Asset Management will be providing kaléo
shareholders a full liquidity event opportunity (the
“Transaction”). Closing of the Transaction, which is contingent
upon the satisfaction of customary conditions, is anticipated to
occur by December 31, 2021.
Tredegar owns 3,382,473 shares of kaléo. Closing of the
Transaction as of December 31, 2021, is projected to result in cash
proceeds for Tredegar of $45.8 million ($13.33 per kaléo share plus
approximately $0.7 million in accrued preferred stock dividends).
Tredegar has the potential to receive additional cash consideration
within approximately six months of closing of up to $1.4 million
($0.41 per kaléo share) in certain post-closing adjustments.
Tredegar also has the opportunity to receive cash consideration of
up to $5.5 million ($1.63 per kaléo share) in 2023 and $8.3 million
($2.44 per kaléo share) in 2024, contingent upon kaléo achieving
certain net revenue targets in 2022 and 2023, respectively. There
can be no assurance as to how much Tredegar will actually receive,
if any, in post-closing payments, including with respect to the
amounts based on kaléo’s net revenue results in future years.
The estimated fair value of Tredegar’s investment in kaléo as of
September 30, 2021, as reported in its financial statements, was
$35.5 million ($10.49 per kaléo share). Tredegar made its
investments in kaléo in August 2007 and December 2008 with an
aggregate cost basis of $7.5 million. Tredegar received a cash
dividend of $17.6 million from kaléo on April 30, 2019. The tax
basis of Tredegar’s investment in kaléo is $15.4 million and
Tredegar expects for tax purposes to utilize capital loss
carryforwards of approximately $25 million to partially offset the
capital gains anticipated from the closing of the Transaction.
Tredegar Corporation is an industrial manufacturer with three
primary businesses: custom aluminum extrusions for the North
American building & construction, automotive and specialty
end-use markets; surface protection films for high-technology
applications in the global electronics industry; and specialized
polyester films primarily for the Latin American flexible packaging
market. Tredegar had 2020 sales from continuing operations of $755
million. With approximately 2,400 employees, the Company operates
manufacturing facilities in North America, South America, and
Asia.
FORWARD-LOOKING AND CAUTIONARY
STATEMENTS
Some of the information contained in this press release may
constitute “forward-looking statements” within the meaning of the
“safe harbor” provisions of the Private Securities Litigation
Reform Act of 1995. When Tredegar uses the words “believe,”
“estimate,” “anticipate,” “appear to,” “expect,” “project,” “plan,”
“likely,” “may” and similar expressions, it does so to identify
forward-looking statements. Such statements are based on Tredegar's
then current expectations and are subject to a number of risks and
uncertainties that could cause actual results to differ materially
from those addressed in the forward-looking statements. It is
possible that Tredegar's actual results and financial condition may
differ, possibly materially, from the forward-looking statements
provided in this press release. Accordingly, you should not place
undue reliance on these forward-looking statements. Factors that
could cause actual results to differ from expectations include,
without limitation, the following: the parties’ inability to
complete the Transaction in a timely manner (or at all); the
possibility that one or more of the conditions to the consummation
of the Transaction may not be satisfied; the possibility that
regulatory approvals required for the Transaction may not be
obtained in a timely manner, if at all; the parties’ ability to
meet expectations regarding the timing, completion and other
matters relating to the Transaction; any event that could give rise
to the termination of the agreement governing the Transaction; and
risks encountered by kaléo in its business, such as operational,
competitive, compliance and regulatory risks, that could adversely
affect kaléo’s ability to achieve the net revenue targets to
trigger additional payments to Tredegar.
Tredegar does not undertake, and expressly disclaims any duty,
to update any forward-looking statement made in this press release
to reflect any change in management’s expectations or any change in
conditions, assumptions or circumstances on which such statements
are based, except as required by applicable law.
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version on businesswire.com: https://www.businesswire.com/news/home/20211129005228/en/
Tredegar Corporation Neill Bellamy, 804-330-1211
neill.bellamy@tredegar.com
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