Olin to Acquire Pioneer
Monday May 21, 6:30 am ET
CLAYTON, Mo. & HOUSTON--(BUSINESS WIRE)--Olin Corporation and Pioneer Companies, Inc. announced today that they have reached a definitive agreement under which Olin will acquire Pioneer, a leading producer of chlor-alkali products. The proposed transaction, which has been approved by the Board of Directors of both companies, calls for Olin to pay $35.00 in cash for each outstanding share of Pioneer common stock. Closing of the transaction is subject to customary conditions including regulatory approvals and approval by Pioneer's shareholders. Olin expects that the transaction will be completed in the second half of 2007.
The combination of Olin's and Pioneer's businesses creates a Chlor-Alkali producer with outstanding capabilities to serve the needs of customers across North America" said Olin Chairman, President and Chief Executive Officer Joseph D. Rupp. "This is a desirable business that we know very well. Our ability to meaningfully add value through synergies and best practices will benefit our shareholders. The combined companies will have a more diversified geographic footprint, a complementary bleach and HCL product mix and a broader distribution network."
Olin management believes that the acquisition will result in at least $35 million of annual cost savings and will be immediately accretive to Olin's earnings per share. Cost savings will be obtained through the optimization of logistics, purchasing, manufacturing costs, and overhead.
On a combined basis, Olin's and Pioneer's Chlor-Alkali businesses generated revenue of more than $1.1 billion in 2006. "With this acquisition, we will become the #3 player in Chlor-Alkali and the #1 player in industrial bleach in North America. The acquisition provides an improved platform from which to continue to grow our chemicals business," Rupp said.
Michael Y. McGovern, the Chairman, President and Chief Executive Officer of Pioneer, commented, "We believe this transaction is very positive for our shareholders and bondholders. We also believe that it will be positive for most of our employees who will join the combined company. Finally, as we have always strived to be a customer-driven company, we believe that our customers will benefit from this transaction since the combined company will be larger and will provide more points of distribution for our customers."
Olin Corporation is a manufacturer concentrated in three business segments: Chlor Alkali Products, Metals, and Winchester. Chlor Alkali Products manufactures chlorine and caustic soda, sodium hydrosulfite, hydrochloric acid, hydrogen, potassium hydroxide and bleach products. Metals products include copper and copper alloy sheet, strip, foil, rod, welded tube, fabricated parts, and stainless steel strip and aluminum strip. Winchester products include sporting ammunition, reloading components, small caliber military ammunition and components, and industrial cartridges.
Pioneer Companies, Inc., based in Houston, manufactures chlorine, caustic soda, bleach, hydrochloric acid and related products used in a variety of applications, including water treatment, plastics, pulp and paper, detergents, agricultural chemicals, pharmaceuticals and medical disinfectants. Pioneer owns and operates four chlor-alkali plants and several downstream manufacturing facilities in North America.
Source: Olin Corporation and Pioneer Companies, Inc.
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