Kansai Paint to Acquire 50% Stake in Polisan Boya

Polisan Holding enters into significant partnership with Kansai Paint. The following information was provided in a disclosure to the Capital Markets Board:

In our special disclosure to the public on 25 May 2016, we announced that Polisan Boya Sanayi ve Ticaret A.Ş. ("Polisan Boya"), a 100% subsidiary of Polisan Holding, was in negotiations with Kansai Paint Co. Ltd. ("Kansai Paint"), one of the world's top 10 and Japan's leading paint manufacturers, regarding the sale of a 50% stake. Today, a Share Purchase Agreement was signed between Polisan Boya and Kansai Paint. The share transfer is expected to be completed in December 2016 following approval from the Competition Board. Polisan Holding Chief Executive Officer Erol Mizrahi stated: "As Polisan Holding, we continuously evaluate acquisition and partnership opportunities with the goal of growth in new countries and business sectors. In this regard, we are excited about the opportunities this partnership, which brings together two strong brands, will create for both companies. At our new facility, which will be completed by the end of 2017, we will continue to offer products and services unprecedented globally by leveraging Polisan Boya's technical expertise in decorative paints and Kansai Paint's strength in global markets. While continuing to provide innovative products and services to our customers operationally, we will also increase our financial profitability with a stronger capital structure. With this partnership, we are pleased to have taken an important step in our long-term growth strategy for Polisan Boya and have come a long way," he said. Kansai Paint Chairman Hiroshi Ishino stated: "We are pleased to combine our strengths with Polisan Boya under the valued 'Polisan' brand, which has a fifty-year history in Turkey. Polisan Boya, the leader in Turkey's decorative paints market, which introduced the Home Cosmetics concept to our sector, will serve as a bridgehead for us in Turkey. With Polisan Boya's strong management, extensive sales network, innovative products and services, and new facility under construction, it is the perfect partner for our growth strategy in the Eastern European market. We believe we will achieve excellent synergies from this partnership with our innovative products and services and that this partnership will contribute to value creation for our stakeholders," he said.

Key Points

• The transfer price to be undertaken by Kansai Paint is USD 113.5 million. Of this amount, USD 68.5 million will be paid to Polisan Holding as share price, and USD 45 million will be paid as a capital contribution to Polisan Boya. As a result, Kansai Paint will hold a 50% stake in Polisan Boya.
• The parties will be represented by an equal number of members on the Board of Directors of the partnership.
• The estimated cost of the new facility planned to be completed by the end of 2017 is EUR 35 million, and the investment will be financed through long-term credit.

Kansai Paint Co. Ltd.

Kansai Paint Co. Ltd., founded in 1918, is a chemical company whose main products include automotive, industrial, decorative, protective and chemical products, and automotive refinish paints. In terms of reporting, the company operates in seven separate geographical regions including Japan, India, Asia, the Americas, Europe, the Middle East and Africa, and is also present in Turkey with automotive and industrial paints. Using the ALESCO brand it introduced in 1987 for its corporate identity, Kansai Paint is listed on the Tokyo Stock Exchange. In 2015, Kansai Paint reported approximately USD 3 billion in sales revenue and USD 169 million in net profit.

Polisan Holding

Polisan Holding, whose foundations were laid 50 years ago, operates in paints, chemicals, port operations, real estate and agriculture. Polisan Holding strengthened its international position further by acquiring a chemical facility in Greece in 2013 and evaluates growth opportunities in profitable new business sectors. In addition to the partnership established with Kansai Paint, Polisan Holding also has a partnership with Dow Chemical, one of the world's leading chemical companies, and aims to strengthen its position among Turkey's leading organizations in the sectors where it operates by establishing partnerships and collaborations with companies that are among the world's largest in their respective sectors. Polisan Holding companies contribute to the development of Turkish society and economy with their superior services and products that have set firsts both globally and in Turkey, while creating high added value for their surroundings and the sectors in which they operate. In 2015, Polisan Holding generated revenue of TRY 906.4 million and EBITDA of TRY 128.3 million (14.2% EBITDA margin) with 1,337 employees and is listed on Borsa Istanbul (BIST) under the ticker "POLHO".