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Asahi Kasei to acquire Polypore for $2.2 billion

February 23, 2015
Chemical Value Chain
Asahi Kasei and Polypore International (Charlotte, NC), a manufacturer of microporous membranes, today announced that they have signed definitive agreements under which Asahi will purchase Polypore for $60.50/share in cash. Polypore currently has two business segments — energy storage and separations media. As an integrated step in this transaction, immediately prior to Asahi’s acquisition of Polypore, 3M (St. Paul, MN) will acquire the assets of Polypore’s separations media business for about $1.0 billion and Asahi will receive the cash proceeds from the asset sale. As a result of these transactions, Asahi will acquire Polypore’s energy storage business for about $2.2 billion. The per share consideration represents a premium of about 24% over the volume weighted average share price for the 20 trading days up to and including 20 February, Polypore says. The transactions have been approved by the boards of directors of Asahi, 3M, and Polypore, and are subject to certain customary regulatory and Polypore shareholder approvals. Both transactions are conditioned on 3M’s transaction with Polypore closing immediately prior to the closing of Asahi’s transaction with Polypore. Polypore’s separations media business is a leading provider of microporous membranes and modules for filtration in the life sciences, industrial and specialty segments with trailing 12-month sales of $210 million as of 27 September, 2014, 3M says.
 
“The combination of our energy storage business with Asahi Kasei and our separations media business with 3M are excellent strategic fits,” says Robert Toth, president and CEO of Polypore. “When you combine our technology, process capabilities, and material science expertise with their technology, global reach and broader resources, there’s a great opportunity to accelerate growth going forward,” Toth says.
 
Polypore is a compelling fit with Asahi’s electronic materials business, led by Asahi’s Hipore lithium-ion battery (LIB) separator with applications in energy storage for both consumer electronics and automotive applications, Asahi says.
The areas of energy and environment will require significant growth and innovation given the global challenge to develop more sophisticated energy storage material solutions, especially in automotive applications, against a backdrop of increasing motorization in emerging countries and rising worldwide demand for eco-friendly cars such as electric and hybrid vehicles, Asahi says. Further growth is expected from the increasing need for high-performance stationary energy storage systems to enable more efficient utilization of renewable energy, Asahi says.
 
Polypore has established an excellent global platform for its LIB separator business, with production plants in China, South Korea, and the United States, and products that complement Asahi’s strategies and objectives, Asahi says. The combination of the LIB separator businesses of the two companies will enable development of more sophisticated products, which will contribute to the advancement of LIB technology and performance and lead to accelerated growth and value creation, Asahi says. The addition of Polypore’s lead-acid battery separator business, which has production plants in China, France, Germany, India, Thailand, and the United States, will reinforce Asahi’s energy storage material businesses as a supplier of a wide range of materials that meet diverse energy solution needs, Asahi says.
 
“We look forward to combining our respective strengths in battery separator technology, achieving new innovations that contribute to solutions to the world’s environmental and energy challenges,” says Toshio Asano, president and representative director of Asahi Kasei.
 
Filtration is a priority technology platform for 3M, the company says. Customers increasingly require higher performance ‘ultra’ filtration that membrane technology delivers, particularly in life sciences and biopharmaceutical segments, 3M says. The addition of Polypore’s separations media business will add new technology capabilities to complement 3M’s existing filtration business in life sciences, industrial, water treatment, electronics and foodservice.
 
“Polypore’s separations media business is an outstanding business that will expand our opportunities in many large and attractive segments,” says Inge Thulin, 3M chairman, president and CEO. “The acquisition of this ultrafiltration membrane technology will enhance 3M’s core filtration platform and help generate new growth opportunities across the company,” Thulin says.
 
3M’s purification business, part of 3M’s industrial business group, is a leader in residential water, commercial foodservice, industrial and life science filtration, the company says. 
 
“The combination of 3M and Polypore’s separations media business will help us to meet customers’ emerging needs for high-value filtration solutions,” says Michael Roman, executive v.p. at 3M industrial business group. “Together, we will be able to offer a broader array of products to both Polypore’s and 3M’s customers, which will accelerate the global growth of our membrane business,” Roman says.
 
On a GAAP reported basis, 3M estimates the acquisition to be $0.03 dilutive to earnings in the first 12 months following completion of the transaction.
 
Bank of America Merrill Lynch acted as financial advisor and Jones Day acted as legal advisor to Polypore. Mitsubishi UFJ Morgan Stanley Securities acted as financial advisor and Cleary Gottlieb Steen & Hamilton acted as legal advisor to Asahi. Centerview Partners acted as financial advisor and Hogan Lovells US acted as legal advisor to 3M.
 
By Deepti Ramesh
 

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