Kraton Corporation to Be Acquired

Kraton Corporation to Be Acquired by DL Chemical Co., Ltd. Kraton Corporation, a leading global sustainable producer of specialty polymers and high-value bio-based products derived from pine wood pulping by-products, announced that it has entered into a definitive merger agreement (the "Merger Agreement") with DL Chemical Co., Ltd., a subsidiary of DL Holdings Co., Ltd. (formerly Daelim Industrial Co., Ltd.), under which DL Chemical will acquire 100% of Kraton in an all-cash transaction representing an enterprise value of approximately USD 2.5 billion. Under the terms of the Merger Agreement, Kraton shareholders will receive USD 46.50 in cash for each Kraton common share they own. As part of the transaction, DL Chemical confirmed that it has fully committed financing. Kevin M. Fogarty, President and Chief Executive Officer of Kraton, said: "Following a comprehensive review of a diverse range of strategic alternatives focused on maximizing value for the benefit of our shareholders, the Kraton Board of Directors determined that the sale of Kraton to DL Chemical is in the best interests of Kraton shareholders. We believe the transaction provides immediate and certain value for Kraton shareholders and represents an attractive premium of approximately 50% relative to Kraton's unaffected market value. Additionally, we believe DL Chemical has the industry presence and resources to continue supporting the global-scale growth of Kraton's business." Dan F. Smith, Chairman of the Board of Kraton, said: "Consistent with our long-standing objective to maximize value for the benefit of our shareholders, the Kraton Board of Directors and management team actively evaluated a diverse range of strategic alternatives over the years. Today's announcement marks the culmination of the strategic review process for Kraton and has resulted in a transaction that we believe delivers significant value for Kraton shareholders. Additionally, we believe the scale and strength of the combined company will create a solid platform to expand Kraton's global reach, further support investment in our current innovation pipeline, and enable further expansion of our sustainability offerings, while also benefiting our customers and employees." Sang Woo Kim, Vice President and Executive Director of DL Chemical, said: "DL Chemical has responsibly managed the petrochemical business within the DL Group for 46 years. Following our acquisition of Kraton's Cariflex business last year, we successfully integrated this business into DL Group. We have also been very interested in Kraton's specialty polymer and bio-based chemical business, and this combination will allow us to offer our customers a broader range of innovative products, while also adding the capability to serve a diverse range of end markets spanning over 70 countries worldwide." The Merger Agreement was unanimously approved by the Kraton Board of Directors, which has recommended that Kraton shareholders vote in favor of the transaction. The acquisition is subject to customary closing conditions, including obtaining shareholder and regulatory approvals, and is expected to close by the end of the first half of 2022. J.P. Morgan Securities LLC is serving as exclusive financial advisor and King & Spalding LLP is serving as legal counsel to Kraton in connection with the transaction. Goldman Sachs is serving as financial advisor and O'Melveny & Myers LLP is serving as legal counsel to DL Chemical in connection with the transaction. Source