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Air Products to Sell Performance Materials Division of its Materials Technologies Segment to Evonik for $3.8 Billion; Intends to Spin-Off the Electronic Materials Division of its Materials Technologies Segment to Shareholders as Versum Materials

Air Products to Host Conference Call on May 6 at 12:00 p.m. USET

Air Products (NYSE:APD), a world-leading industrial gases company, announced that it has signed a definitive agreement today to sell the Performance Materials Division (PMD) of its Materials Technologies segment to Evonik Industries AG (EVK.DE), a world leader in specialty chemicals and materials, for $3.8 billion in cash. 

The sale of PMD is expected to close before the end of 2016, and is subject to regulatory approvals and customary closing conditions. Under the terms of the agreement, operational facilities, supplier contracts, labs, contracts, customers, and employees and certain legal entities associated with PMD would transfer to Evonik. Evonik intends to continue to run PMD from Allentown, Pennsylvania.

Air Products also intends to spin-off its Electronic Materials Division (EMD) to shareholders as a separate public company, called Versum Materials. Air Products is on track to separate EMD by the end of September 2016 and will continue to evaluate whether debt and equity market conditions are favorable for a tax-free spin-off. 

Air Products has been consistently executing against its strategic, Five-Point Plan, which includes focusing on industrial gases and taking actions on non-core businesses. In September 2015, the Company announced plans to separate Materials Technologies, which includes PMD and EMD.

“The sale of PMD is consistent with the long-term strategy for Air Products that we announced in September 2014,” said Air Products’ Chairman, President and Chief Executive Officer, Seifi Ghasemi. “I am very pleased that PMD has a great future ahead of it as a core business of a company which is even larger than Air Products. 

“As for the balance of our Materials Technologies segment, I am also very excited about the future of EMD, which we currently intend to spin-off as a new, world-class public company named Versum Materials. Guillermo Novo will be the CEO of the new company, and I will be non-executive chairman of Versum Materials while maintaining my current roles at Air Products. 

“As a result of these moves, Air Products will be in an even stronger position to take advantage of the exciting investment opportunities to grow our core Industrial Gases business,” Ghasemi said.

About PMD
PMD generated $1.04 billion in revenue and $241 million of Adjusted EBITDA over the last twelve months ending March 31, 2016*. PMD had $244 million of Adjusted EBITDA in fiscal 2015*. PMD consists of epoxy curing agents (40 percent of revenues), polyurethane additives (32 percent) and specialty additives businesses (28 percent). PMD has approximately 1,100 employees and includes major production facilities in the U.S., Germany, the United Kingdom, China and Japan. PMD products provide distinct, performance-enhancing benefits in use across the construction, marine, automotive, industrial cleaning, and other markets.

About EMD
EMD generated $974 million in revenue and $351 million of adjusted EBITDA over the last twelve months ending March 31, 2016*. EMD consists of advanced materials (35 percent of revenues), process materials (39 percent) and delivery systems (26 percent). EMD has approximately 1,900 employees and includes major production facilities in the U.S., Korea and Taiwan. EMD’s focus is to be the materials partner of choice for the semiconductor industry, providing low cost/high value in use products for next generation chips used in mobile devices, Internet of Things, and PCs.

*Financial information for divisions that comprise the Materials Technologies segment reported within Air Products; no allocated corporate costs. Based on non-GAAP measures.

Conference Call Details:
The teleconference on Friday, May 6, 2016 at 12:00 p.m. USET will be open to the public and the media in listen-only mode by telephone and Internet broadcast. 

Live teleconference: 913-312-0699
Passcode: 9240687
Internet broadcast: Available on the Event Details page on Air Products’ Investor Relations web site. 

Telephone replay: 888-203-1112 or 719-457-0820 (international)
Passcode: 9240687
This will be available from 4:00 p.m. USET on May 6 through 4:00 p.m. ET on May 13.
Internet replay: Available on the Event Details page on Air Products’ Investor Relations web site.

Advisors
Lazard acted as sole financial advisor to Air Products. Skadden, Arps, Slate, Meagher & Flom LLP acted as lead counsel for Air Products.

View Reconciliation of Non-GAAP Financial Measures.