2022-07-18 | NYSEAM:CCF | Press release

The transformative acquisition expands the company’s suite of specialty polymers and attractive curing technologies, advancing Chase Corp’s product portfolio, customer reach and strategic growth trajectory.

Chase Corporation (NYSE American: CCF), one of the world’s leading manufacturers of protective materials for high-reliability applications in various market sectors, today announced that it has entered into a definitive agreement to acquire NuCera Solutions, (“NuCera&CloseCurlyDoubleQuote ; or the “CloseCurlyDoubleQuote Company” of SK Capital (a New York-based private equity firm). NuCera is a recognized global leader in the production and development of highly differentiated specialty polymers and curing technologies to serve demanding applications, offering essential products to enable end product functionality, performance and reliability.

NuCera is headquartered in Houston, Texas with its main production facility based in Barnsdall, Oklahoma and additional international sales offices in France and Singapore. The Company employs approximately 130 people worldwide. For the 12-month period ended April 30, 2022, the Company recorded estimated revenue of $83 million with adjusted EBITDA1 margins greater than 25%.

NuCera will be acquired for a purchase price of $250 million, pending any working capital adjustments and excluding acquisition-related costs. The purchase will be financed using Chase’s existing revolving credit facility and available cash. The transaction is expected to close by the end of the third calendar quarter of 2022, subject to customary closing conditions and regulatory approvals. Chase expects this acquisition to be earnings accretive in the first year of ownership. Chase will benefit from modest leverage (~1.2x pro forma net leverage) after the acquisition and will retain ongoing financial flexibility.

Adam P. Chase, President and CEO of Chase Corporation, said, “The acquisition of NuCera is transformational in advancing Chase’s strategic growth priorities. NuCera is a recognized leader in the development and manufacture of specialty polymers and polymerization technologies that serve demanding applications globally. The company’s strong market position, North American manufacturing footprint and captive synthesis capabilities will allow us to gain scale and expand our presence in several new high-growth end markets, while maintaining both a solid balance sheet and financial flexibility. NuCera’s culture and technology-driven growth mindset closely aligns with that of Chase, and we are delighted to welcome the NuCera team and their highly differentiated products to Chase Corporation and its customers. .”

Steven McKeown, President and CEO of NuCera, said, “After a period of notable growth, we are delighted to join the Chase family which provides strong cultural and strategic alignment to our business. Our portfolio of innovative, high-performance products is well aligned with Chase’s core philosophy of making a material difference. On behalf of everyone at NuCera, we can’t wait to begin our journey with the Chase team.”

Mario Toukan, Managing Director of SK Capital, said, “It has been a pleasure supporting the development and growth of NuCera. SK has invested heavily in NuCera’s people, capabilities and facilities, establishing a leading platform of technology-driven specialty polymers. We believe NuCera is well positioned for continued growth under Chase Corporation ownership and wish them continued success.”

The NuCera acquisition boosts Chase’s proven core growth strategy and is an exciting step in Chase’s continued transformation. NuCera will extend Chase’s global reach to new blue-chip customers and high-growth, attractive end markets such as personal care, polymer additives, coatings, diversified consumer products and masterbatches. In addition, Chase expects to have significant long-term synergy opportunities. Chase will continue to market under the NuCera brands and the business will be integrated into Chase’s Adhesives, Sealants and Additives reporting unit.

Moelis & Company LLC acted as exclusive financial advisor and Nelson Mullins Riley & Scarborough LLP acted as legal advisor to Chase Corporation. Lincoln International acted as sales advisor and Goodwin Procter LLP acted as legal advisor to SK Capital and NuCera.

About NuCera Solutions

With an 85-year history of innovative chemistry, NuCera is a global leader in the development and manufacture of highly differentiated specialty polymers for markets that demand high quality and performance: adhesives, coatings, imaging, masterbatches, personal care, plastics and other consumer applications. . NuCera supplies performance chemicals to global markets from its highly flexible manufacturing facilities in Barnsdall, OK, which are supported by R&D and applications laboratories as well as pilot plant facilities. For more information, please visit http://www.nucerasolutions.com

About Chase Corporation

Chase Corporation, a global specialty chemicals company founded in 1946, is a leading manufacturer of protective materials for high reliability applications worldwide. More information can be found on our website https://chasecorp.com/

Use of Non-GAAP Financial Measures

The Company uses non-GAAP financial measures in its press releases. Adjusted Net Income, Adjusted Diluted EPS, EBITDA, Adjusted EBITDA and Free Cash Flow are non-GAAP financial measures. The Company believes that Adjusted Net Income, Adjusted Diluted EPS, EBITDA, Adjusted EBITDA and Free Cash Flow are useful performance measures as they are used by its management team to measure operating performance, allocate resources to improve the company’s financial performance, evaluate the effectiveness of its business strategies and communicate with its board of directors and investors about its financial performance. The Company believes that Adjusted Net Income, Adjusted Diluted EPS, EBITDA, Adjusted EBITDA and Free Cash Flow are commonly used by financial and other analysts in the industries in which the Company operates, and thus provide useful information for investors. However, Chase’s calculation of Adjusted Net Income, Adjusted Diluted EPS, EBITDA, Adjusted EBITDA and Free Cash Flow may not be comparable to similarly titled measures published by others. Non-GAAP financial measures should be considered in addition to, and not as an alternative to, the Company’s reported results prepared in accordance with GAAP.

Caution Regarding Forward-Looking Statements

Certain statements in our press releases are forward-looking. These may be identified by the use of forward-looking words or phrases, including, but not limited to, “believe,” “expect,” “anticipate,” “should,” “expect,” “estimated ” and “potential.” These forward-looking statements are based on Chase Corporation’s current expectations and include statements relating to the expected timing of the acquisition described in this press release, the expected benefits of the transaction, including future financial and operating results, cost savings, revenue enhancement and increased reported profits that can be realized from the transaction. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for such forward-looking statements. To comply with the terms of the safe harbor, the company cautions investors that forward-looking statements made by the company are not guarantees of future performance and that a variety of factors could cause the results and experience The company’s actual results differ materially from those anticipated results or other expectations expressed in the company’s forward-looking statements. The risks and uncertainties that could affect the operations, performance, development and results of the Company’s business include, but are not limited to, the following: uncertainties relating to the timing of the acquisition and receipt of required regulatory approvals; the risk that the businesses involved in the acquisition will not be successfully integrated or that such integration will be more difficult, longer or more costly than expected; the risk that the revenue synergies and cost savings expected from the transaction will not be fully realized or realized within the expected timeframes; the risk that revenues following the Merger will be lower than expected; uncertainties related to operating costs, potential loss of customers and business disruption following the transaction, including, without limitation, the risk that difficulties in maintaining employee relationships will be greater provided that ; uncertainties relating to economic conditions, including inflation; uncertainties related to customer projects and commitments; the price and availability of equipment, materials and inventory; technological development; performance issues with suppliers and subcontractors; economic growth; delays in testing new products; the effectiveness of cost reduction plans; rapid technological changes; the highly competitive environment in which the Company operates; as well as the expected impact of the coronavirus disease (COVID-19) pandemic on the Company’s business. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. The Company undertakes no obligation to update or revise any forward-looking statement made in this release or which may from time to time be made by or on behalf of the Company. Additional information regarding factors that could cause actual results to differ materially from these forward-looking statements is available in the company’s filings with the Securities and Exchange Commission, including the risks and uncertainties identified in Part I, Section 1A – Risk Factors from the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2021.

1 A reconciliation between US GAAP and the non-GAAP financial measure used in this press release has been included in the investor presentation filed with the SEC.

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