GCP APPLIED TECHNOLOGIES INC. (NYSE:GCP) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Contract
As previously announced, on March 2, 2017, GCP Applied Technologies
Inc. (the Company) entered into a final, binding and irrevocable
offer letter (the Offer Letter) with Henkel AG Co. KGaA (Henkel) to
which Henkel made a binding offer (the Offer) to acquire the
Companys Darex Packaging Technologies business for approximately
$1.05 billion, subject to working capital and certain other
adjustments (the Divestiture). to the terms of the Offer Letter,
following the conclusion of statutory employee consultation
processes in connection with the Divestiture by the relevant works
councils in France, the Company accepted the Offer and
countersigned the Stock and Asset Purchase Agreement (the Initial
Purchase Agreement) with respect to the Divestiture on April 27,
2017. The Initial Purchase Agreement was previously executed by
Henkel.
Inc. (the Company) entered into a final, binding and irrevocable
offer letter (the Offer Letter) with Henkel AG Co. KGaA (Henkel) to
which Henkel made a binding offer (the Offer) to acquire the
Companys Darex Packaging Technologies business for approximately
$1.05 billion, subject to working capital and certain other
adjustments (the Divestiture). to the terms of the Offer Letter,
following the conclusion of statutory employee consultation
processes in connection with the Divestiture by the relevant works
councils in France, the Company accepted the Offer and
countersigned the Stock and Asset Purchase Agreement (the Initial
Purchase Agreement) with respect to the Divestiture on April 27,
2017. The Initial Purchase Agreement was previously executed by
Henkel.
On June 30, 2017, the Company and Henkel entered into an Amended
and Restated Stock and Asset Purchase Agreement (the Amended
Purchase Agreement). The Initial Purchase Agreement was amended to,
among other things, provide for a delayed closing in certain
non-U.S. jurisdictions. The Amended Purchase Agreement is otherwise
substantially similar to the Initial Purchase Agreement, which was
summarized in the Companys Current Report on Form 8-K filed with
the Securities and Exchange Commission on March 2, 2017 and April
28, 2017, which summaries are incorporated herein by reference. The
foregoing summary of the Amended Purchase Agreement and the
transactions contemplated by the Amended Purchase Agreement does
not purport to be complete and is subject to, and qualified in its
entirety by reference to, the full text of the Amended Purchase
Agreement, which is filed as Exhibit 2.1 to this Current Report on
Form 8-K and is incorporated herein by reference.
and Restated Stock and Asset Purchase Agreement (the Amended
Purchase Agreement). The Initial Purchase Agreement was amended to,
among other things, provide for a delayed closing in certain
non-U.S. jurisdictions. The Amended Purchase Agreement is otherwise
substantially similar to the Initial Purchase Agreement, which was
summarized in the Companys Current Report on Form 8-K filed with
the Securities and Exchange Commission on March 2, 2017 and April
28, 2017, which summaries are incorporated herein by reference. The
foregoing summary of the Amended Purchase Agreement and the
transactions contemplated by the Amended Purchase Agreement does
not purport to be complete and is subject to, and qualified in its
entirety by reference to, the full text of the Amended Purchase
Agreement, which is filed as Exhibit 2.1 to this Current Report on
Form 8-K and is incorporated herein by reference.
Item 2.01. Completion of Acquisition or Disposition of Assets.
On July 3, 2017, the Company announced the completion of the
Divestiture. The Company received approximately $1.05 billion in
cash in connection with the Divestiture, subject to working
capital and certain other adjustments.
Divestiture. The Company received approximately $1.05 billion in
cash in connection with the Divestiture, subject to working
capital and certain other adjustments.
Item 2.05. Costs Associated with Exit or Disposal Activities.
On June 28, 2017, the Board of Directors of the Company approved
a business restructuring and repositioning plan (the Plan) that
includes actions (i) to address stranded general and
administrative costs resulting from the Divestiture and (ii) to
streamline its operations, reduce its global cost structure and
transition the Company to a construction products technologies
company. The Plan also includes certain repositioning actions,
primarily for recruitment, consulting and project management
costs associated with the organizational realignment of the
Company. The Company expects that it will incur total costs in
connection with the Plan of $22 million to $26 million, of which
approximately $21 million is for restructuring activities,
comprised primarily of severance and other employee-related
costs, and approximately $3 million is for repositioning
activities. In addition, the Company expects to incur
approximately $6 million in capital expenditures related to the
repositioning activities. Substantially all of the costs under
the Plan are expected to result in cash expenditures. The
restructuring actions are expected to result in the net reduction
of approximately 225 employee positions, with substantially all
of the restructuring and repositioning actions under the Plan
expected to be completed by the fourth quarter of 2018.
a business restructuring and repositioning plan (the Plan) that
includes actions (i) to address stranded general and
administrative costs resulting from the Divestiture and (ii) to
streamline its operations, reduce its global cost structure and
transition the Company to a construction products technologies
company. The Plan also includes certain repositioning actions,
primarily for recruitment, consulting and project management
costs associated with the organizational realignment of the
Company. The Company expects that it will incur total costs in
connection with the Plan of $22 million to $26 million, of which
approximately $21 million is for restructuring activities,
comprised primarily of severance and other employee-related
costs, and approximately $3 million is for repositioning
activities. In addition, the Company expects to incur
approximately $6 million in capital expenditures related to the
repositioning activities. Substantially all of the costs under
the Plan are expected to result in cash expenditures. The
restructuring actions are expected to result in the net reduction
of approximately 225 employee positions, with substantially all
of the restructuring and repositioning actions under the Plan
expected to be completed by the fourth quarter of 2018.
In the second quarter of 2017, the Company expects to incur
approximately $15 million of restructuring expenses and $0.5
million of repositioning expenses related to the Plan.
approximately $15 million of restructuring expenses and $0.5
million of repositioning expenses related to the Plan.
Item 7.01. Regulation FD Disclosure.
On July 3, 2017, the Company issued a press release announcing that
it had completed the Divestiture and approved the Plan described in
Item 2.05 above. A copy of the press release is attached hereto as
Exhibit 99.1.
it had completed the Divestiture and approved the Plan described in
Item 2.05 above. A copy of the press release is attached hereto as
Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(b) >Pro Forma Financial Information
On July 3, 2017, the Company and its consolidated subsidiaries
(GCP) completed the Divestiture as described in this Current Report
on Form 8-K.
(GCP) completed the Divestiture as described in this Current Report
on Form 8-K.
On July 3, 2017, GCP released certain unaudited pro forma
consolidated financial information as of and for the period ended
March 31, 2017, and for the periods ended December 31, 2016, 2015,
and 2014, which is attached as Exhibit 99.2 hereto (the Pro Forma
Financial Information) and incorporated herein by reference. The
Pro Forma Financial Information gives effect to the Divestiture,
and is derived from GCP’s historical financial information.
consolidated financial information as of and for the period ended
March 31, 2017, and for the periods ended December 31, 2016, 2015,
and 2014, which is attached as Exhibit 99.2 hereto (the Pro Forma
Financial Information) and incorporated herein by reference. The
Pro Forma Financial Information gives effect to the Divestiture,
and is derived from GCP’s historical financial information.
The Pro Forma Financial Information shall not be deemed filed for
purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the Exchange Act), or incorporated by reference in any
filing under the Securities Act of 1933, as amended, or the
Exchange Act, except as shall be expressly set forth by specific
reference in such a filing.
purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the Exchange Act), or incorporated by reference in any
filing under the Securities Act of 1933, as amended, or the
Exchange Act, except as shall be expressly set forth by specific
reference in such a filing.
(d) >Exhibits
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Exhibit No.
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Description of Exhibit
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2.1
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Amended and Restated Stock and Asset Purchase Agreement
dated as of June 30, 2017, between GCP Applied Technologies Inc. and Henkel AG Co. KGaA.* |
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99.1
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Press release issued by GCP Applied Technologies Inc.
dated July 3, 2017. |
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99.2
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Unaudited Pro Forma Consolidated Financial Statements of
GCP Applied Technologies Inc. |
*Schedules and exhibits have been omitted to Item 601(b)(2) of
Regulation S-K, but a copy will be furnished to the Securities and
Exchange Commission upon request.
Regulation S-K, but a copy will be furnished to the Securities and
Exchange Commission upon request.
Cautionary Statement Concerning Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking
statements, that is, information related to future, not past,
events. Such statements generally include the words believes,
plans, intends, targets, will, expects, suggests, anticipates,
outlook, continues, or similar expressions. Forward-looking
statements include, without limitation, statements about the
proposed transaction and the anticipated timing thereof; expected
financial positions; results of operations; cash flows; financing
plans; business strategy; operating plans; capital and other
expenditures; competitive positions; growth opportunities for
existing products; benefits from new technology and cost reduction
initiatives, plans and objectives; and markets for securities. Like
other businesses, the Company is subject to risks and uncertainties
that could cause its actual results to differ materially from its
projections or that could cause other forward-looking statements to
prove incorrect. Factors that could cause actual results to
materially differ from those contained in the forward-looking
statements, or that could cause other forward-looking statements to
prove incorrect, include, without limitation, the possibility that
the expected strategic benefits or opportunities from the
Divestiture may not be realized, or may take longer to realize than
expected; risks related to: the cyclical and seasonal nature of the
industries that the Company serves; foreign operations, especially
in emerging regions; changes in currency exchange rates; the cost
and availability of raw materials and energy; the effectiveness of
the Companys research and development, new product introductions
and growth investments; acquisitions and divestitures of assets and
gains and losses from dispositions; developments affecting the
Companys outstanding liquidity and indebtedness, including debt
covenants and interest rate exposure; developments affecting the
Companys funded and unfunded pension obligations; warranty and
product liability claims; legal proceedings; uncertainties related
to the Companys ability to realize the anticipated benefits of the
spin-off /separation from W.R. Grace and the value of the Companys
common stock following the spin-off; the inability to establish or
maintain certain business relationships and relationships with
customers and suppliers or the inability to retain key personnel;
and hazardous materials and the costs of compliance with
environmental regulation. These and other factors are identified
and described in more detail in the Company’s Annual Report on
Form 10-K, which has been filed with the U.S. Securities and
Exchange Commission and is available online at www.sec.gov. Readers
are cautioned not to place undue reliance on the Companys
projections and forward-looking statements, which speak only as the
date thereof. The Company undertakes no obligation to publicly
release any revision to the projections and forward-looking
statements contained in this announcement, or to update them to
reflect events or circumstances occurring after the date of this
Current Report on Form 8-K.
statements, that is, information related to future, not past,
events. Such statements generally include the words believes,
plans, intends, targets, will, expects, suggests, anticipates,
outlook, continues, or similar expressions. Forward-looking
statements include, without limitation, statements about the
proposed transaction and the anticipated timing thereof; expected
financial positions; results of operations; cash flows; financing
plans; business strategy; operating plans; capital and other
expenditures; competitive positions; growth opportunities for
existing products; benefits from new technology and cost reduction
initiatives, plans and objectives; and markets for securities. Like
other businesses, the Company is subject to risks and uncertainties
that could cause its actual results to differ materially from its
projections or that could cause other forward-looking statements to
prove incorrect. Factors that could cause actual results to
materially differ from those contained in the forward-looking
statements, or that could cause other forward-looking statements to
prove incorrect, include, without limitation, the possibility that
the expected strategic benefits or opportunities from the
Divestiture may not be realized, or may take longer to realize than
expected; risks related to: the cyclical and seasonal nature of the
industries that the Company serves; foreign operations, especially
in emerging regions; changes in currency exchange rates; the cost
and availability of raw materials and energy; the effectiveness of
the Companys research and development, new product introductions
and growth investments; acquisitions and divestitures of assets and
gains and losses from dispositions; developments affecting the
Companys outstanding liquidity and indebtedness, including debt
covenants and interest rate exposure; developments affecting the
Companys funded and unfunded pension obligations; warranty and
product liability claims; legal proceedings; uncertainties related
to the Companys ability to realize the anticipated benefits of the
spin-off /separation from W.R. Grace and the value of the Companys
common stock following the spin-off; the inability to establish or
maintain certain business relationships and relationships with
customers and suppliers or the inability to retain key personnel;
and hazardous materials and the costs of compliance with
environmental regulation. These and other factors are identified
and described in more detail in the Company’s Annual Report on
Form 10-K, which has been filed with the U.S. Securities and
Exchange Commission and is available online at www.sec.gov. Readers
are cautioned not to place undue reliance on the Companys
projections and forward-looking statements, which speak only as the
date thereof. The Company undertakes no obligation to publicly
release any revision to the projections and forward-looking
statements contained in this announcement, or to update them to
reflect events or circumstances occurring after the date of this
Current Report on Form 8-K.
to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed by
the undersigned, thereunto duly authorized.
amended, the registrant has duly caused this report to be signed by
the undersigned, thereunto duly authorized.
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GCP APPLIED TECHNOLOGIES INC.
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(Registrant)
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By
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/s/ John W. Kapples
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John W. Kapples
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Vice President and General Counsel
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Dated: July 3, 2017
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EXHIBIT INDEX
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Exhibit No.
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Description of Exhibit
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2.1
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Amended and Restated Stock and Asset Purchase Agreement
dated as of June 30, 2017, between GCP Applied Technologies Inc. and Henkel AG Co. KGaA.* |
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99.1
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Press release issued by GCP Applied Technologies Inc.
dated July 3, 2017. |
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99.2
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Unaudited Pro Forma Consolidated Financial Statements of
GCP Applied Technologies Inc. |
*Schedules and exhibits have been omitted
GCP Applied Technologies Inc. ExhibitEX-2.1 2 exhibit21detroit-xamendeds.htm EXHIBIT 2.1 Exhibit Exhibit 2.1EXECUTION VERSIONAMENDED AND RESTATEDSTOCK AND ASSET PURCHASE AGREEMENTBY AND BETWEENGCP APPLIED TECHNOLOGIES INC.ANDHENKEL AG & CO. KGaA_______________________Dated as of June 30,…To view the full exhibit click here
About GCP APPLIED TECHNOLOGIES INC. (NYSE:GCP)
GCP Applied Technologies Inc. (GCP) is engaged in the production and sale of specialty construction chemicals, specialty building materials, and packaging sealants and coatings. The Company operates through three segments: Specialty Construction Chemicals (SCC), Specialty Building Materials (SBM) and Darex Packaging Technologies (Darex). The SCC segment manufactures and markets products to manage the performance of Portland cement, and materials based on Portland cement, such as concrete admixtures and cement additives, as well as concrete production management systems. The SBM segment manufactures and markets building envelope products, residential building products and specialty construction products. The Darex segment manufactures and markets sealants and coatings for use in beverage and food containers, and other consumer and industrial applications. Its brands include ADVA, CBA, SYNCHRO, HEA2, TDA, STRUX, MIRA, ADPRUFE, HYDRODUCT, ADCOR, DARABLEND and APPERTA.