Polypore International To Be Acquired By Asahi Kasei In $3.2 Bln Deal

(RTTNews) - Filtration technology company Polypore International Inc. (PPO) said Monday that it has agreed to acquire by Japanese chemical and fiber maker Asahi Kasei Corp. for an enterprise value of about $3.2 billion. Shares of Polypore are gaining more than 12 percent in the regular trading session following the announcement.

As an integrated step in the transaction, immediately prior to Asahi Kasei's acquisition of Polypore, diversified technology company 3M Co. (MMM) will acquire the assets of Polypore's Separations Media segment for about $1 billion. Asahi Kasei will receive the cash proceeds from this asset sale.

Charlotte, North Carolina-based Polypore noted that the definitive agreements require that the sale of the company as well as the integrated sale of the Separations Media segment close after closing conditions for both transactions have been satisfied and that the closings of the transactions are conditioned upon one another.

The transactions have been approved by the boards of directors of Asahi Kasei, 3M, and Polypore, and are subject to approval by Polypore shareholders.

Under the deal with Asahi Kasei, a U.S. subsidiary of the Japanese company will acquire all of the outstanding shares of Polypore's common stock for $60.50 per share in cash. The per share offer price represents a 14 percent premium to Polypore's closing stock price of $52.95 on Friday.

Asahi Kasei noted that the transaction would occur immediately after the closing of the sale of the Separations Media segment to 3M. As a result of these transactions, Asahi Kasei will acquire Polypore's Energy Storage business for total net consideration of about $2.2 billion.

Robert Toth, Polypore's President and Chief Executive Officer said, "The combination of our Energy Storage business with Asahi Kasei and our Separations Media business with 3M are excellent strategic fits, which we believe create value for our people, customers and shareholders. When you combine our technology, process capabilities, and material science expertise with their technology, global reach and broader resources, there's a great opportunity to accelerate growth going forward."

Asahi Kasei noted that Polypore is a compelling fit with its electronic materials business, led by Asahi Kasei's Hipore lithium-ion battery or LIB separator, with applications in energy storage for both consumer electronics and automotive applications.

Polypore's LIB separator business has production plants in the U.S., South Korea, and China, with products that complement Asahi Kasei's strategies and objectives. The combination of the LIB separator businesses of the two companies will enable the further development of more sophisticated products.

In addition, the addition of Polypore's lead-acid battery separator business, which has production plants in the U.S., Thailand, France, Germany, India, and China, will reinforce Asahi Kasei's energy storage material businesses as a comprehensive supplier of a wide range of materials that meet diverse energy solution needs.

Asahi Kasei also said that the transaction is consistent with its medium-term strategic managements initiative, "For Tomorrow 2015," which is focused on providing new value for society by enabling "living in health and comfort" and "harmony with the natural environment."

To realize this vision, Asahi Kasei has identified Environment & Energy, Residential Living, and Health Care as three areas of strategic focus to leverage its existing technological and business competencies for expansion and growth.

BofA Merrill Lynch acted as financial advisor to Polypore, while Jones Day acted as its legal advisor.

For Asahi Kasei, Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. acted as its financial advisor, while Cleary Gottlieb Steen & Hamilton LLP acted as its legal advisor.

Centerview Partners LLC acted as financial advisor and Hogan Lovells US LLP acted as legal advisor to 3M.

PPO is trading at $59.58, up $6.64 or 12.52 on a volume of 2.96 million shares.