Simpson Thacher is representing Melrose PLC (“Melrose”) on its disposal of Dynacast to KDI Holdings Inc, a newly incorporated company managed by Kenner & Company, Inc. Dynacast is a leading global provider of precision die cast components for a wide variety of industries including healthcare, consumer electronics, computers and peripherals, and automotive.
The consideration comprises $590 million in cash payable on completion, and in addition Dynacast takes with it $17.1 million of net pension liabilities. Melrose also retains all cash generated by Dynacast up to completion. The disposal was announced on June 6, 2011. Completion is subject to regulatory approvals, among other things, and is expected to occur during August 2011.
Melrose, a UK listed company whose shares are traded on the London Stock Exchange, seeks to acquire businesses it understands, improve them by a mixture of investment and changed management focus and realise the value created and return it to shareholders in the most efficient way possible. Melrose acquired Dynacast in May 2005 and during the six years of Melrose’s ownership the enterprise value of Dynacast has increased from £197 million to £370 million. Melrose intends to return the cash proceeds of the Dynacast disposal, net of costs, to shareholders following completion.
The Simpson Thacher team for the transaction included Adam Signy, Clare Gaskell amd Oliver Vallée (M&A); and David Vann and Ellen Frye (Antitrust). Paralegal Daniel Cox also provided valuable assistance.