Mativ Announces Proposed Sale of Engineered Papers Business for $620 Million - Seite 2

Transaction Details

• The proposed transaction will also be subject to customary closing conditions, including regulatory approvals and satisfaction of the consultation process with the applicable works councils in France, and is expected to close in the fourth quarter of 2023
• Evergreen Hill Enterprise, Pte. Ltd., an affiliate of BMJ, is based in Singapore and is part of a successful, Indonesian-based privately held group of diversified companies serving a wide variety of industries, such as banking, tobacco, consumer electronics, telecommunications, fast moving consumer goods, e-commerce, plantation, hotels & real estate, and many others
• The potential buyer is expected to fund the proposed transaction with existing cash balance and is not dependent on capital markets for financing

Divestiture & Debt Reduction Highlights

• The gross sale price of $620 million reflects approximate 6.5x multiple on EP’s trailing 12-month Adjusted EBITDA (as of June 30, 2023 quarter); trailing 12-month sales for EP were approximately $530 million
• Expected net transaction proceeds of approximately $575 million will be used primarily to reduce debt; net proceeds represent approximately 35% of outstanding net debt
• Engineered Papers financial results will be reported as assets held for sale beginning in 3Q:23

Capital Allocations Plans

• The Company intends to adjust the annualized dividend of $1.60 per share to $0.40 per share, effective for the September 2023 dividend payment; this represents a total annual dividend payment reduction from $88 million to $22 million
• Management estimates the new dividend will represent approximately 25% of annualized free cash flow post-transaction, reflecting a more growth-oriented and balanced allocation of capital
• Further, the Company has approved a $30 million stock buyback program; while opportunistic repurchases are expected to be executed, debt reduction will continue to be the primary use of excess cash flow in the near-term

Post-Transaction Mativ Financial Highlights

• The Company believes its total post-transaction near-term sales would be approximately $2.2 billion with an Adjusted EBITDA margin of approximately 13%
• Following the transaction, the Company expects to deliver long-term annualized sales growth in the 3% to 5% range, and multi-year margin expansion toward our 15% target
• As a result of debt reduction upon close, a rebalanced capital allocation strategy, and expected core EBITDA growth, the Company believes it will be within its targeted credit agreement net leverage range of 2.5x to 3.5x by the end of 2024
• Following the transaction, Mativ will no longer have exposure to the tobacco industry

Transaction Investor Conference Call