Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 1, 2011
SEALED AIR CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 1-12139 | 65-0654331 | ||
| (State or other | (Commission | (I.R.S. Employer | ||
| jurisdiction of incorporation) | File Number) | Identification No.) |
| 200 Riverfront Boulevard | ||
| Elmwood Park, New Jersey | 07407 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s
telephone number, including area code: 201-791-7600
Not Applicable
(Former name or former address, if changed since last report)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
| Item 7.01 Regulation FD Disclosure | ||||||||
| Item 9.01 Financial Statements and Exhibits | ||||||||
| Signature | ||||||||
| Exhibit Index | ||||||||
| EX-99.1 | ||||||||
| EX-99.2 | ||||||||
Table of Contents
Item 7.01 Regulation FD Disclosure.
On June 1, 2011, Sealed Air Corporation, a Delaware corporation (“Sealed Air”), and Diversey
Holdings, Inc., a Delaware Corporation (“Diversey”), issued a joint press release announcing the
execution of the Agreement and Plan of Merger (the “Merger Agreement”), dated as of May 31, 2011,
by and among Sealed Air, Solution Acquisition Corp., a wholly-owned subsidiary of Sealed Air, and
Diversey. A copy of the press release is attached as Exhibit 99.1 to this report and is furnished
herewith.
On June 1, 2011, Sealed Air provided supplemental information regarding the transactions
contemplated by the Merger Agreement in a presentation to investors. A copy of the investor
presentation is attached as Exhibit 99.2 hereto and is furnished herewith.
The information in this Item 7.01 of this Form 8-K and the exhibits attached hereto are being
furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, nor shall
they be deemed incorporated by reference in any filing under the Securities Act of 1933, as
amended, except as may be expressly set forth by specific reference in such filing.
Additional Information
This communication is being made in respect of the proposed merger involving Sealed Air and
Diversey. The common stock of Sealed Air to be issued pursuant to the merger will be issued in a
private placement exempt from the registration requirements of the Securities Act. Pursuant to the
Merger Agreement, Sealed Air has agreed to file a resale registration statement which is required
to be effective at the closing of the merger.
Forward-Looking Statements
This Current Report on Form 8-K and the information furnished herein contains forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by such words as “anticipates,” “believes,” “plan,”
“assumes,” “could,” “estimates,” “expects,” “will” and similar expressions. These statements
include comments as to Sealed Air’s beliefs and expectations as to future events and trends
affecting Sealed Air’s business or the successful outcome of the business combination. Examples of
such forward-looking statements may include, but are not limited to, statements about the benefits
of the business combination transaction between Diversey and Sealed Air, potential synergies and
cost savings, the potential accretion of the transaction to Sealed Air’s earnings and free cash
flow, future financial and operating results, the expected timing of the completion of the
transaction and Sealed Air’s plans, objectives, expectations and intentions with respect to future
operations, products and services. The following factors, among others, could cause actual results
to differ materially from the anticipated results or other expectations expressed in the
forward-looking statements: general business and economic conditions; the competitive
Table of Contents
environment;
the failure to realize synergies and cost savings from the transaction or delay in
realization thereof; the businesses of Sealed Air and Diversey may not be combined successfully, or
such combination may take longer, be more difficult, time-consuming or costly to accomplish than
expected; and adverse effects of the merger on employee retention and on Sealed Air’s and
Diversey’s business relationships with third parties, including key customers and distributors. For
more extensive information, see “Risk Factors” and “Cautionary Notice Regarding Forward-Looking
Statements,” which appear in Sealed Air’s most recent Annual Report on Form 10-K, as filed with the
Securities and Exchange Commission, as may be updated by Sealed Air’s Quarterly Reports on Form
10-Q or Current Reports on Form 8-K. While Sealed Air may elect to update forward-looking
statements at some point in the future, Sealed Air specifically disclaims any obligation to do so,
even if estimates change and, therefore, you should not rely on these forward-looking statements as
representing our views as of any date subsequent to today.
Item 9.01 Financial Statements and Exhibits
| (d) | Exhibits | ||
| 99.1 | Press Release, dated June 1, 2011 | ||
| 99.2 | Investor Presentation, dated June 1, 2011 |
Table of Contents
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SEALED AIR CORPORATION |
||||
| Date: June 1, 2011 | By: | /s/ H. Katherine White | ||
| Name: | H. Katherine White | |||
| Title: | Vice President, General Counsel and Secretary | |||
Table of Contents
Exhibit Index
| Exhibit No. | Description | |
99.1
|
Press Release, dated June 1, 2011 | |
99.2
|
Investor Presentation, dated June 1, 2011 |
Exhibit 99.1
|
 |
SEALED AIR TO ACQUIRE DIVERSEY FOR $4.3 BILLION
Creates a Global Leader in Sustainable Solutions that Provide Hygiene, Protection,
Food Safety and Security
Food Safety and Security
Combined Company Well Positioned to Benefit from Attractive Global Megatrends
Sealed Air Leverages Expertise in New $40+ Billion Market
Expected to be Accretive in First Full Year After Close
ELMWOOD PARK, NJ and STURTEVANT, WI — June 1, 2011 — Sealed Air Corporation (“Sealed Air”) (NYSE:
SEE) and Diversey Holdings, Inc. (“Diversey”) announced that they have entered into a definitive
agreement under which Sealed Air will acquire Diversey, a leading solutions provider to the global
cleaning and sanitization market, in a transaction valued at $4.3 billion. The transaction is
expected to be completed in 2011 and is expected to be accretive to earnings in the first full year
following completion.
Under the terms of the agreement, Diversey shareholders will receive $2.1 billion in cash and an
aggregate of 31.7 million shares of Sealed Air common stock valued at $25.68 per share based on
Sealed Air’s closing stock price on May 31, 2011 for a total equity consideration of $2.9 billion.
Diversey is a privately-owned company, controlled by members of the Johnson family and Clayton,
Dubilier & Rice, LLC (“CD&R”). Upon closing of the transaction, Diversey shareholders are expected
to own approximately 15% of Sealed Air common stock.
Diversey provides cleaning, sanitization and hygiene solutions to industrial and retail customers
in the food and beverage, food service, health care, and lodging sectors, as well as to building
service contractors worldwide. In 2010, Diversey generated net sales of $3.1 billion and Adjusted
EBITDA1 of $453 million. Diversey employs more than 10,000 people worldwide and operates
in more than 60 countries. Sealed Air is a leading provider of food and industrial system solutions
that help ensure that food retains its freshness, products arrive undamaged, and transit
efficiencies are maximized to reduce energy and waste. Sealed Air is focused on pioneering a
differentiated, proprietary range of offerings in material science, automation technology and
service-based solutions in order to provide comprehensive solutions to its customers. Sealed Air
operates in 52 countries, employs more than 16,000 people and generated net sales of $4.5 billion
in 2010.
“This transaction represents a strategic growth opportunity that leverages Sealed Air’s core
competencies and positions our company to further capitalize on the megatrends that drive both
businesses,” said William V. Hickey, President and Chief Executive Officer of Sealed Air. “With
Diversey, we will expand our footprint beyond specialty packaging solutions by gaining entry into a
$40+ billion chemical cleaning and hygiene industry that has attractive fundamentals and is already
in our value chain. This combination is also financially compelling, and we expect it to deliver
enhanced earnings per share and free cash flow generation, creating meaningful value for our
shareholders.”
Mr. Hickey continued, “Sealed Air and Diversey have shared values, overlapping customers and end
markets, and a common vision. By harnessing the strengths and sales capabilities of both companies,
we will be able to bolster our solutions and services competencies and position Sealed Air for
continued
| 1 | See attached supplement for non-U.S. GAAP reconciliation |
market leadership. We look forward to welcoming Diversey’s talented employees to the Sealed
Air team.”
“We are excited about the opportunities we have to grow with Sealed Air through increased scale and
expanded reach,” said Edward F. Lonergan, Diversey President and Chief Executive Officer. “We share
a culture of innovation and a global vision for our business. Like Sealed Air, Diversey is
committed to sustainable solutions, both in terms of our business and in terms of helping our
customers protect human health while reducing waste generation and consumption of natural
resources. I am confident that this is a winning combination for our employees and customers around
the world.”
Diversey Chairman Helen Johnson-Leipold said, “Diversey shareholders determined that the best
long-term opportunity for all stakeholders was a combination with Sealed Air. This was a difficult
decision, but the compelling rationale was that together, we can leverage our expertise to
transform our industry more rapidly and in more ways than either company could do alone. As the
companies got to know each other, the leaders discovered an alignment of values and shared passion
for industry-transforming innovation and sustainable solutions. The businesses, the teams, and our
ambitions mesh well. And I’m pleased that Sealed Air has committed to continuing a strong presence
in Racine, Wisconsin, the historic base of operations for Johnson family businesses.”
CD&R Partner Richard J. Schnall added, “The operating improvements and growth initiatives we
implemented with management under our ownership provide Diversey with a solid foundation for a
rewarding future as an integral part of Sealed Air. Bringing the companies together will open the
door to exciting new market opportunities and create a very strong global leader with broader
capabilities to serve customers more effectively.”
Benefits of the Transaction
| • | Creates a Global Leader in Sustainable Solutions that Provide Hygiene, Protection, Food Safety and Security: The combination of Diversey and Sealed Air creates a global leader, well positioned to capitalize on attractive megatrends including increased emphasis on food safety and security, health and hygiene, and sustainability. With Diversey, Sealed Air will benefit from entry into a $40+ billion cleaning and sanitization market, where increased regulatory focus is driving demand for greater expertise. |
| • | Extends Geographic Footprint and Enhances Growth Opportunities in Developing Regions: Diversey operates in more than 60 countries and is a market leader in Europe, Asia Pacific, Turkey, Brazil, Africa and other high growth developing regions. Sealed Air will further reinforce its global footprint and will be uniquely positioned to capitalize on demand for improving hygiene and food safety standards in developing markets. On a pro forma basis, Sealed Air will have greater than 60% of its revenue generated outside of North America and 21% in developing regions. |
| • | Expands Revenue Opportunity with Overlapping Customer Base: Sealed Air and Diversey bring integrated customer solutions to many of the same blue chip customers in shared end markets, which expands opportunities to grow revenue. |
| • | Broadens Solutions Offering: With Diversey, Sealed Air expands its existing leadership position and expertise by offering customers a broader array of products and services, including Diversey’s SmartDose® dosing for cleaners, Optifill® sealable prescription fulfillment systems, Taski Swingo XP® floor cleaning equipment and Oxivir® disinfectants. The combined company will be well positioned to meet customers’ growing demand for convenience, safety and hygiene, while reducing customer costs through increased efficiencies. |
| • | Combines Complementary Business Models: Both Sealed Air and Diversey share a complementary total systems approach and value-based selling model. Both companies provide customized solutions involving equipment, supplies and services, offered in many cases through the same distributors, to customers in end markets including food processing, food service, office management and retail. |
| • | Drives Robust Research and Development Efforts: Both Sealed Air and Diversey have a history of innovation — successfully developing market-leading solutions, services and technologies. Sealed Air has a robust development pipeline and has recently focused R&D resources developing new products and services that target the hygiene and food safety markets. |
| • | Delivers Compelling Financial Benefits: The transaction is expected to be accretive to earnings per share and free cash flow in the first full year following completion. The transaction is expected to generate approximately $50 million in total cost synergies in the second full year after close, with approximately $30 million generated in year one. |
| • | Efficient Use of Balance Sheet and Free Cash Flow: The transaction represents an opportunity to make efficient use of Sealed Air’s balance sheet strength. The strong free cash flow of the combined company will support rapid deleveraging and continued commitment to Sealed Air’s dividend policy. |
Leadership and Community Commitments
William V. Hickey will continue as President and Chief Executive Officer of Sealed Air. At the
close of the transaction, Edward F. Lonergan, President and Chief Executive Officer of Diversey,
and his team will join Sealed Air, and Mr. Lonergan will continue to lead the Diversey business.
Sealed Air plans to maintain Diversey’s Americas business unit and R&D functions in Racine,
Wisconsin and to continue Diversey’s support and involvement in the Racine community.
Financing and Approvals
The transaction will be financed with cash on hand and proceeds from committed debt financing
provided by Citi. The transaction, which is expected to be completed in 2011, is subject to the
satisfaction of customary closing conditions, including applicable regulatory approvals.
Advisors
Citi and Blackstone Advisory Partners L.P. acted as financial advisors and Simpson Thacher &
Bartlett LLP acted as legal advisor to Sealed Air. Goldman, Sachs & Co acted as financial advisor
and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to Diversey. Lazard acted as
advisor to the Johnson family. Debevoise & Plimpton acted as legal advisor to CD&R.
Conference Call and Webcast
Sealed Air and Diversey will host a conference call today, June 1, 2011, at 8:30 a.m. ET to discuss
this morning’s announcement. To access the call, please dial (866) 610-1072 (international: (678)
905-9428) and reference conference ID number 72182140. A replay of the conference call will be
available as soon as practicable following the end of the call until June 15, 2011 at 11:59 p.m.
ET. To access the replay, please dial (800) 642-1687 (international: (706)
645-9291) and reference conference ID number 72182140. In addition, an audio webcast of the call
will be available live and will be archived on the investor relations portions of both companies’
Web sites at http://ir.sealedair.com and www.diversey.com/investors, respectively.
About Sealed Air
For over fifty years, Sealed Air has been a leading global innovator and manufacturer of a wide
range of packaging and performance-based materials and equipment systems that now serve an array of
food, industrial, medical, and consumer applications. Operating in 52 countries, Sealed Air’s
international reach generated revenue of approximately $4.5 billion in 2010. With widely recognized
brands such as Bubble Wrap® brand cushioning, Jiffy® protective mailers, Instapak® foam-in-place
systems and Cryovac® packaging technology, Sealed Air continues to identify new trends, foster new
markets, and deliver innovative solutions to its customers. For more information about Sealed Air,
please visit the Company’s web site at www.sealedair.com.
About Diversey
Diversey, Inc. is committed to a cleaner, healthier future. Its products, systems and expertise
make food, drink and facilities safer and more hygienic for consumers and for building occupants.
With sales into more than 175 countries, Diversey is a leading global provider of commercial
cleaning, sanitation and hygiene solutions. The company serves customers in the building
management, lodging, food service, retail, health care, and food and beverage sectors. Diversey is
headquartered in Sturtevant, Wisconsin, USA. To learn more, visit www.diversey.com.
About Clayton, Dubilier & Rice, LLC
Founded in 1978, Clayton, Dubilier & Rice, LLC is a private equity firm with an investment strategy
predicated on producing superior financial returns through building stronger, more profitable
businesses. The Firm’s professionals include a combination of skilled investment decision-makers
and seasoned corporate leaders from global businesses such as ABB, Allstate, BAE, BBA, BTR, Disney,
Dow, Eaton Vance, Emerson Electric, Gap, GE, IBM, Procter & Gamble, Tesco, Unilever and Williams,
among others. Since inception, CD&R has managed the investment of approximately $16 billion in 49
U.S. and European businesses with an aggregate transaction value of approximately $80 billion. For
more information, please visit www.cdr-inc.com.
SEC Registration
The common stock to be issued pursuant to the transaction will be issued in a private placement
exempt from the registration requirements of the Securities Act. Pursuant to the registration
rights agreement, Sealed Air has agreed to file a resale registration statement which is required
to be effective at the Closing.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements can be identified by such words as
“anticipates,” “believes,” “plan,” “assumes,” “could,” “estimates,” “expects,” “will” and similar
expressions. These statements include comments as to the Company’s beliefs and expectations as to
future events and trends affecting the Company’s business or the successful outcome of the business
combination. Examples of such forward-looking statements may include, but are not limited to,
statements about the benefits of the business combination transaction between Diversey and the
Company, potential synergies and cost savings, the potential accretion of the transaction to the
Company’s earnings and free cash flow, future financial and operating results, the expected timing
of the completion of the transaction and the
Company’s plans, objectives, expectations and intentions with respect to future operations,
products and services. The following factors, among others, could cause actual results to differ
materially from the anticipated results or other expectations expressed in the forward-looking
statements: general business and economic conditions; the competitive environment; the failure to
realize synergies and cost savings from the transaction or delay in realization thereof; the
businesses of Sealed Air and Diversey may not be combined successfully, or such combination may
take longer, be more difficult, time-consuming or costly to accomplish than expected; and adverse
effects of the merger on employee retention and on Sealed Air’s and Diversey’s business
relationships with third parties, including key customers and distributors. For more extensive
information, see “Risk Factors” and “Cautionary Notice Regarding Forward-Looking Statements,” which
appear in our most recent Annual Report on Form 10-K, as filed with the Securities and Exchange
Commission, as may be updated by the Company’s Quarterly Reports on Form 10-Q or Current Reports on
Form 8-K. While the Company may elect to update forward-looking statements at some point in the
future, the Company specifically disclaims any obligation to do so, even if estimates change and,
therefore, you should not rely on these forward-looking statements as representing our views as of
any date subsequent to today.
Use of Non-U.S. GAAP Measures
Our management uses non-U.S. GAAP financial measures to evaluate the Company’s performance, which
excludes items we consider unusual or special items. We believe the use of such financial measures
and information may be useful to investors. We believe that the use of non-U.S. GAAP measures helps
investors to gain a better understanding of core operating results and future prospects, consistent
with how management measures and forecasts the company’s performance, especially when comparing
such results to previous periods or forecasts. Reconciliation of such non-U.S. GAAP financial
measures and information to comparable U.S. GAAP measures and information appears later in this
press release.
Contacts for Sealed Air:
For Investors
Amanda Butler
Director, Investor Relations
201-703-4210
amanda.butler@sealedair.com
Director, Investor Relations
201-703-4210
amanda.butler@sealedair.com
For Media
Ken Aurichio
Director, Corporate Communications
201-703-4164
ken.aurichio@sealedair.com
Director, Corporate Communications
201-703-4164
ken.aurichio@sealedair.com
Contact for Diversey:
John Matthews
Senior Vice President, Corporate Affairs, Chief of Staff to the President and CEO
262-631-2120
john.matthews@diversey.com
Senior Vice President, Corporate Affairs, Chief of Staff to the President and CEO
262-631-2120
john.matthews@diversey.com
Diversey Holdings, Inc.
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
(Unaudited, in millions)
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
(Unaudited, in millions)
| Year Ended | ||||
| December 31, | ||||
| 2010 | ||||
Net income (loss) |
$ | 32.7 | ||
Add: Net income (loss) attributable to noncontrolling interests |
— | |||
Add: Income tax provision |
65.9 | |||
Add: Interest expense, net |
146.2 | |||
Add: Notes redemption and other costs |
— | |||
Add: Depreciation and amortization expense |
116.8 | |||
EBITDA |
$ | 361.7 | ||
Add: Operating expenses of Holdings only |
0.0 | |||
Add: Restructuring related costs |
8.6 | |||
Add: Acquisition and divestiture adjustment |
10.4 | |||
Add: Non-cash expenses and charges |
21.1 | |||
Add: Non-recurring gains or losses |
31.1 | |||
Add: Compensation adjustment |
20.0 | |||
Adjusted EBITDA |
$ | 452.9 | ||
Total net sales |
$ | 3,127.7 | ||
Adjusted EBITDA % of Net Sales |
14.5 | % | ||
Exhibit 99.2
| Creating a Global Leader in Sustainable Solutions that Provide Hygiene, Protection, Food Safety and Security Sealed Air’s Acquisition of Diversey June 1, 2011 |
| Safe Harbor and Regulation G Statement This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by such words as "anticipates," "believes," "plan," "assumes," "could," "estimates," "expects," "will" and similar expressions. These statements include comments as to the Company's beliefs and expectations as to future events and trends affecting the Company's business or the successful outcome of the business combination. Examples of such forward-looking statements may include, but are not limited to, statements about the benefits of the business combination transaction between Diversey and the Company, potential synergies and cost savings, the potential accretion of the transaction to the Company's earnings and free cash flow, future financial and operating results, the expected timing of the completion of the transaction and the Company's plans, objectives, expectations and intentions with respect to future operations, products and services. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: general business and economic conditions; the competitive environment; the failure to realize synergies and cost-savings from the transaction or delay in realization thereof; the businesses of Sealed Air and Diversey may not be combined successfully, or such combination may take longer, be more difficult, time-consuming or costly to accomplish than expected; and adverse effects of the merger on employee retention and on Sealed Air's and Diversey's business relationships with third parties, including key customers and distributors. For more extensive information, see "Risk Factors" and "Cautionary Notice Regarding Forward-Looking Statements," which appear in our most recent Annual Report on Form 10- K, as filed with the Securities and Exchange Commission, as may be updated by the Company's Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. While the Company may elect to update forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so, even if estimates change and, therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today. Our management uses non-U.S. GAAP financial measures to evaluate the Company's performance, which excludes items we consider unusual or special items. We believe the use of such financial measures and information may be useful to investors. We believe that the use of non-U.S. GAAP measures helps investors to gain a better understanding of core operating results and future prospects, consistent with how management measures and forecasts the company's performance, especially when comparing such results to previous periods or forecasts. For important information on our use of non-U.S. GAAP financial measures and information, including reconciliations of such non- U.S. GAAP financial measures and information to comparable U.S. GAAP measures and information, please refer to the financial tables that appear later in this presentation. |
| William V. Hickey President and Chief Executive Officer Edward F. Lonergan President and Chief Executive Officer David H. Kelsey Senior Vice President and Chief Financial Officer Today's Presenters |
| Agenda 1. Our Vision Bill Hickey 2. Overview of Diversey Ed Lonergan 3. Strategic Combination Bill Hickey 4. Financial Review Dave Kelsey 5. Q&A |
| Latin America Asia-Pacific Europe North America East 10 14 27 49 Sealed Air Overview Global leader and innovator of performance-based materials and equipment systems for food, industrial, medical and consumer customers Technology leadership with an emphasis on proprietary solutions that deliver measurable value 2010 Net Sales: $4.5 billion and Adjusted EBITDA 1 of $732 million 114 manufacturing facilities Operations in 52 countries 16,100 employees worldwide 2010 Net Sales By Region 2010 Net Sales By Segment Food Packaging Food Solutions Protective Packaging Other 43 21 29 7 Protective Packaging 29 1 See appendix for EBITDA reconciliation. |
| Our Value Proposition Technology leader Long history of innovation Recurring revenue business model (razor / razorblade) System-sell enhances performance, productivity and yield Reputation built on decades of outstanding service Leading salesforce, application engineers and food scientists Value-added supplier Remote diagnostics, supply chain monitoring, lifecycle analysis Global partner to our customers Presence in all regions and major markets |
| Our Strategic Vision Who we want to be to our customers Global supplier of choice for sustainable solutions, products and services Value-added partner who directly improves our customers' bottom line Globally recognized as technology-driven and customer focused |
| Evaluating Growth Opportunities Our Criteria Become more relevant to our customers with differentiated solutions Exploit our core competencies Enhance our financial profile Drive attractive returns for our shareholders ? ? ? ? Diversey Acquisition |
| Why Diversey? The RIGHT Industry $40+ billion industry with attractive growth and fundamentals already present in our value chain Similar megatrends to Sealed Air - health, hygiene, food safety and sustainability Sealed Air can capitalize on its expertise and competencies in this space The RIGHT Company Innovative global leader Overlapping customers, end markets and geographies Value-based total systems solutions with talented customer-facing team The RIGHT Transaction Attractive valuation with upside from margin improvement and synergies Strong free cash flow for rapid deleveraging Low integration risk |
| New Sealed Air at a Glance Fiscal Year Ending December 31, 2010 (USD in Millions) Pro Forma Combined Net Sales $4,490 $3,128 $7,618 Adjusted EBITDA 1 $732 $453 $1,235 Adjusted EBITDA Margin 1 16.3% 14.5% 16.2% Countries 52 64 69 Manufacturing Facilities 114 26 140 2 1 See appendix for EBITDA reconciliation. 2 Includes $50 million of cost synergies. |
| Agenda 1. Our Vision Bill Hickey 2. Overview of Diversey Ed Lonergan 3. Strategic Combination Bill Hickey 4. Financial Review Dave Kelsey 5. Q&A |
| Latin America Asia-Pacific Europe, MEA North America East 9 19 52 20 Diversey Overview A leading solution provider to $40+ billion global cleaning and sanitization market Serves six primary global sectors with diversified end market exposure Significant global presence with leading positions in every region served 2010 Net Sales and Adjusted EBITDA 1 of $3.1 billion and $453 million, respectively Operations in 64 countries 10,500 employees worldwide 2010 Net Sales By Region 2010 Net Sales By End Market Building Mgt / Serv. Contract. Food & Bev. Proc. Food Service Retail Lodging Health Care Other 24 23 16 12 11 9 5 1 See appendix for EBITDA reconciliation. |
| Business Sector Overview Food Service Food & Beverage Building Mgmt/ Service Contr. Health Care 16% 11% 23% 24% 12% 9% Note: 5% current business in "other" sectors. Retail Lodging |
| Total Systems Approach Consumables Tools Equipment Services Cleaners Degreasers Sanitizers Disinfectants Warewashing Hand Care Air Fresheners Dosing & Dispensing Scrubber / Driers / Vacuums Foam Generators Sweepers Disc Polishers Microfiber Systems Multifunctional Trolleys Cleaning Utensils and Systems Water, Energy Use Auditing Food Safety Training e-Business Solutions Green Cleaning Procedures Business Model: Provide integrated solutions by combining products and services to improve our customers' operating efficiency |
| Diversey: An Innovation-Driven Company, in Both Business Model and Portfolio Oxivir(r) SmartDose(r) Taski Swingo XP(r) Value proposition built on customer efficiency and sustainability targets Proprietary water, energy auditing capabilities Measurable sustainable improvement, globally advantaged benchmarking databases Risk management: food safety, brand protection Business Model Innovation Product Innovation Broadest solution set in industry: chemicals, machines, tools, utensils Customers served both direct and through best-in- class distribution partners Differentiated systems for supplies and equipment management, data capture and back-office management Optifill(r) Food & Beverage Sustainable Solutions Full Facility Solutions Revoflow(r) RTD(r) |
| Diversey Financial Profile Net Sales Adjusted EBITDA / Margin 1 ($ in millions) 1 See appendix for EBITDA reconciliation. |
| Agenda 1. Our Vision Bill Hickey 2. Overview of Diversey Ed Lonergan 3. Strategic Combination Bill Hickey 4. Financial Review Dave Kelsey 5. Q&A |
| Sealed Air and Diversey: A Compelling Business Combination Global Leader Complementary Business Models Broadens Solutions Offering Customer Base Extends Geographic Footprint Robust R&D Creates a global leader in sustainable solutions that provide hygiene, protection, food safety and security Positioned to benefit from key global megatrends Shared approach to system-sell business model Equipment, supplies and services (razor / razorblade model) Optimizes efficiency, productivity and materials utilization Expands and extends existing leadership positions Expands portfolio of value-added products and services Provide integrated solutions to broad customer base Overlapping channels and end markets Increases business opportunity in high growth markets Combined operating presence in 69 countries Strong track record of commercializing solutions for new and existing end markets |
| The New Sealed Air Global leader in hygiene, protection, food safety and security Technology-driven and customer focused value-added partner 2010 Pro Forma Net Sales and Adjusted EBITDA 1 of $7.6 billion and $1.2 billion, respectively 140 manufacturing facilities Operations in 69 countries 26,500 employees worldwide Cleaning & Sanitization 42% Food Packaging 25% Protective Packaging 17% Food Solutions 12% Other 4% 2010 Net Sales Pro Forma Combined 1 See appendix for EBITDA reconciliation. |
| Increased protein demand in developing regions Global emergence of the supermarket Safety, security & hygiene concerns Aging populations Increased use of medical services, treatments & devices Improved healthcare delivery Ready-meal demand (fresh heat-and-eat options) Growing dine-out demand (food service applications) Safety, security & hygiene concerns Sustainable solutions Enhanced solutions to increase resource efficiency Full lifecycle approach Growing international B2B & B2C transactions Expansive global supply chains & traceability Growing e-commerce & fulfillment shipping Higher Living Standards Health & Wellness Dining Convenience Sustainability Global Trade Positioned to Address Megatrends: Food Safety & Security, Health & Hygiene, Sustainability |
| Extends Geographic Footprint 10% 37% 16% Latin America: $0.7 North America: $2.9 Europe, MEA: $2.8 Asia Pacific: $1.2 Net Sales by Region $ billions, 2010 37% Diversey Sealed Air |
| Long-Standing Relationships with Blue-Chip Customers Sealed Air Diversey |
| Expanded Solutions Offering Complementary Products & Solutions Combined Market Access Make food, drink and facilities safer and more hygienic Reduce environmental impact of products ~9,000 Customer Facing Team Presence in 69 Countries Distribution Access to 175+ Countries Food & Beverage Food Service Preserve and keep fresh Ensure food safety Reduce waste Keep clean Protect Health Care Industrial / Consumer OEMs Lodging / Retail Building Service Distribution Office Supply |
| Example: Most Comprehensive Solution Set for Food Processing Industry Employee Sanitation Facility Cleaning Equipment Packaging Solutions High Performance, Cook-in Bags/Casing and Vacuum Packaging Multi-Layered, Co-Extruded Polyolefin Films Food Safety Diversey Sealed Air Process and Operational Excellence, Water, Energy Audits OpEx and Sanitation Chemicals |
| Machines and Utensils Air Quality Hand Hygiene Dual Ovenable and Microwavable Solutions for Ready Meals Dispensing / Portion Control Surface Cleaners Restroom Sanitation Floor and Carpet Care Warewashing Degreaser On Premise Laundry Food Safety Training & Supplies Retort and Aseptic Shelf- Stable Technology Diversey Sealed Air Example: Most Comprehensive Solution Set for Restaurants and Hospitality Industry |
| Dosing and Dispensing Inflatable Void Fill Packaging On-site Production of Protective Foam Packages Air Cellular Cushioning Material Disinfectants Cushioned and Protective Mailers Diversey Sealed Air Facility Cleaning Equipment General Purpose Profession and Consumer Branded Chemicals Example: Most Comprehensive Solution Set for Office Supply Distributors |
| Bringing Together Two Technology-Driven Companies Labs / Research Facilities 50 10 Scientists & Engineers 250+ 210+ Equipment & Application Experts 600+ 280+ Patents 2,500 1,700 Trademarks 3,000 1,400 Selected Product Highlights Roots of Innovation Sealed Air founded by two entrepreneurs focused on developing innovative packaging solutions Diversey heritage in engineering- focused entrepreneurial spirit through five generations of Johnson Family ownership Proteus ReNew Signet Dry Foam Carpet Care |
| Product Excellence and Responsibility Highest Achievement and Gold Awards |
| Combination Enhances Our Growth Opportunity Geographies Extends and reinforces Sealed Air's global positions Leverages Diversey's presence in high growth markets Combined company to benefit from improving hygiene and food safety standards in developing regions Customers Integrated solutions for overlapping customers Enhance relationships through broader range of solutions New channels / new relationships for both Sealed Air and Diversey Products Expanded portfolio to better address customer needs New solutions developed from joint R&D efforts New opportunities to reduce customer costs |
| Agenda 1. Our Vision Bill Hickey 2. Overview of Diversey Ed Lonergan 3. Strategic Combination Bill Hickey 4. Financial Review Dave Kelsey 5. Q&A |
| Sealed Air has agreed to acquire Diversey to form a global leader in sustainable solutions that provide hygiene, protection, food safety and security Transaction value of $4.3 billion 9.7x Adjusted LTM EBITDA 1 8.7x Adjusted LTM EBITDA 1 including $50 million cost synergies Total consideration to Diversey shareholders of $2.1 billion of cash and 31.7 million Sealed Air common shares $1.4 billion of Diversey net debt to be refinanced Transaction approved by principal Diversey shareholders Johnson family and Clayton, Dubilier & Rice Expected closing in 2011 subject to customary regulatory approvals Transaction Summary 1 LTM 3/31/11 Adjusted EBITDA as defined in public filings. |
| Significant Financial Benefits Expands net sales opportunity Margin expansion opportunities Continuation of efficiency initiatives Embedded operating leverage Cost synergies of $50 million per year Expected to be fully realized in two years $30 million expected in first year Accretive to earnings per share and free cash flow Returns in excess of cost of capital Attractive and efficient use of balance sheet |
| Transaction Financing We have committed financing in place for $4.5 billion Approximately $3.8 billion funded debt at closing Attractive cost of funds Pro forma leverage of 4.4x Net Debt / Adjusted EBITDA 1 Strong free cash flow generation supports rapid deleveraging Ample liquidity to operate enlarged business No near term maturities Committed to achieve investment grade credit rating Management focused on deleveraging No impact on funding W. R. Grace settlement 1 LTM 3/31/11 Pro Forma EBITDA as defined in public filings. Includes $50 million in cost synergies. |
| Attractive Free Cash Flow Profile ($ in millions) Pro Forma 2010 Adjusted EBITDA 1 $ 1,235 Capex (182) Change in Net Working Capital (79) Cash Interest Expense 2 (300) Cash Taxes 3 (232) Free Cash Flow $442 1 See appendix for EBITDA reconciliation. Includes $50 million of cost synergies. 2 Pro forma interest based on new capital structure. 3 Illustrative cash tax rate of 35%. Sizable EBITDA with upside Moderate capex requirements Efficient working capital Attractive cost of funds Strong and growing free cash flow of approximately $440 million per year Plan to continue current dividend policy |
| A Powerful Case for Multiple Expansion Current Sealed Air 2 EV / 2011E EBITDA: 8.3x Price / 2011E EPS: 14.9x Diversey Peer Group 1, 2 EV / 2011E EBITDA: 10.0x Price / 2011E EPS: 19.6x 1 Represents average of Nalco and Ecolab. 2 Estimates obtained from FactSet. 60% 40% 2010 Pro Forma Adjusted EBITDA Contribution |
| Q & A |
| Appendix |
| Appendix: Sealed Air EBITDA Reconciliation Reconciliation of Net Earnings Available to Common Stockholders to Non-U.S. GAAP EBIT, EBITDA and Adjusted EBITDA (Unaudited, in millions) |
| Appendix: Diversey EBITDA Reconciliation 1 1 1 Adjusted EBITDA defined as Credit Agreement EBITDA as disclosed in public filings. |
| + |