RPM Announces Agreement with Elliott Management on New Initiatives to Improve Operating and Financial Performance and Enhance Shareholder Value | Business Wire
International Inc. (NYSE:RPM), a world leader in speciality
coatings and sealants, today announced several new initiatives designed
to bolster operational and financial improvement and enhance shareholder
value. The initiatives announced today include the appointment of two
new independent directors to RPM’s Board of Directors (the “Board”),
Kirkland (“Kirk”) B. Andrews and John M. Ballbach. The formation of
a new Operating Improvement Committee (“OIC”) of the Board. As part of
its commitment to good corporate governance, the Company also announced
that it'll approve and recommend amendments to its Amended and
Restated Certificate of Incorporation to provide for an annually elected
Board. These initiatives follow constructive dialogue and collaboration
with Elliott Management Corporation (“Elliott”) and entry into an
associated cooperation agreement between RPM and affiliates of Elliott.
RPM’s newly formed OIC will be composed of four independent directors:
Kirk Andrews and Robert Livingston, who'll serve as Co-Chairs, Thomas
Gross and John Ballbach. Frank Sullivan, Chairman and CEO of RPM, will
serve as a non-voting ex officio member. The OIC’s review, among other
things, will focus on operational and financial initiatives to create
and enhance shareholder value. Certain of these initiatives will centre
around setting and achieving new company margin targets based on
top-performing industry standards and optimisation of RPM’s balance
sheet, including streamlining working capital and implementing new
capital allocation guidelines and capital return plans. The Company has
engaged AlixPartners, LLP, a leading outside management consulting firm,
to work with the OIC and management on this review. RPM expects to
provide a comprehensive update to the market as promptly as practicable,
but in no event by later than November 30, 2018. Concurrent with the
announcement, the Company will introduce transparent metrics to track
achievements relative to plan on a regular basis.
“Over the past year, RPM’s Board and management have begun working on
initiatives to drive greater efficiency across our operations while
maintaining our growth momentum,” said Mr. Sullivan. “We've made some
progress in reducing SG&A and identified key opportunities to improve
manufacturing efficiencies, lower operating costs. Improve working
capital. The initiatives announced today position us to progress
significantly on these plans. Both Kirk and John add new perspectives
and proven operational track records to our Board. We look forwards
to benefitting from their expertise and experience as we take action to
drive operational efficiencies, long-term performance. Value
Jeff Rosenbaum, Portfolio Manager at Elliott Management, said, “We're
pleased to have worked constructively with RPM’s Board and management
team on the initiatives announced today. RPM has an outstanding
collection of leading brands. We believe the company has significant
potential for further operating, financial. Balance sheet
improvements. Kirk Andrews brings strong portfolio and operational
review and execution experience with his leadership in NRG’s recent $855
million cost and margin enhancement program. And John Ballbach brings
strong industry know-how and leadership skills from his work as a
Valspar senior executive. They'll both add immediate value to RPM’s
Board and newly formed Operating Improvement Committee. We're confident
that this ‘no stone unturned’ review will lead to several hundred basis
points of margin improvement, capital returned to shareholders.
superior overall results for the Company.”
The appointments of Messrs. Andrews and Ballbach are effective
immediately and expand the size of RPM’s Board from 12 to 14 members, 13
of whom are independent.
Under the terms of the cooperation agreement between RPM and Elliott,
Elliott has agreed to customary standstill, voting and other provisions.
The full cooperation agreement will be filed on a Form 8-K with the
Securities and Exchange Commision.
About Kirkland (“Kirk”) B. Andrews
As Chief Financial Officer of NRG Energy, Inc. (“NRG”), a Fortune 500
integrated power company, Mr. Andrews leads all of NRG’s corporate
financial functions, including treasury, financial planning, accounting,
risk management, tax, insurance, supply chain and investor relations. He
also plays an instrumental role in formulating and executing NRG’s
capital allocation strategies and in financing the company’s repowering
initiatives. Mr. Andrews has also helped lead NRG’s transformation plan,
announced in 2017 –. Targeting significant cost and operational
enhancements across the company.
Mr. Andrews joined NRG in 2011 after a successful 15-year career in
investment banking. Mr. Andrews served as Managing Director and Head of
Power Mergers and Acquisitions and subsequently headed the North
American Power Investment Banking group at Citigroup Global Markets.
Later, he served as Managing Director and co-head of Power and
Utilities–Americas at Deutsche Bank. In his banking career, Mr. Andrews
led numerous large and innovative strategic, debt, equity and
commodities transactions, including multiple advisory roles for NRG.
About John M. Ballbach
A seasoned chemicals and coatings industry executive, Mr. Ballbach
served as an Operating Advisor with Clayton, Dubilier &. Rice
(“Clayton”), a private equity investment firm, from 2014 to 2017. In
connection with his role as an Operating Advisor at Clayton, Mr.
Ballbach also served as Chairman and director for Solenis, LLC, a
speciality chemicals manufacturer and portfolio company of Clayton. Mr.
Ballbach served as an independent director at Valspar from 2012 until
the company’s sale to Sherwin-Williams in 2017. In addition, he's a
former corporate officer of Valspar, having served as President and
Chief Operating Officer from 2002 to 2004 and in various senior
management positions since 1990.
From 2007 to 2012, Mr. Ballbach served as Chairman of VWR International,
LLC, a leading global laboratory supply and distribution company. He
was President and Chief Executive Officer from 2005 to 2012. Mr.
Ballbach served as a director and member of the audit committee of The
Timken Company, a publicly traded global manufacturer of bearings and
related components, until mid-2014. He also previously served as a
Director of Celanese Corp, a global technology leader in the production
of speciality materials and chemical products.
RPM International Inc. owns subsidiaries that are world leaders in
speciality coatings, sealants, building materials and related services
across three segments. RPM’s industrial products include roofing
systems, sealants, corrosion control coatings, flooring coatings and
other construction chemicals. Industrial companies include Stonhard,
Chemical and RPM
Belgium Vandex. RPM’s consumer products are used by
professionals and do-it-yourselfers for home maintenance and improvement
and by hobbyists. Consumer brands include Rust-Oleum,
RPM’s speciality products include industrial cleaners, colorants,
exterior finishes, speciality OEM coatings, edible coatings, restoration
services equipment and speciality glazes for the pharmaceutical and food
industries. Speciality segment companies include Day-Glo,
Wood Finishes, Mantrose-Haeuser,
Additional details can be found at www.RPMinc.com
and by following RPM on Twitter at www.twitter.com/RPMintl.
For more information, contact Barry M. Slifstein, vice president –
investor relations, at 330-273-5090 or email@example.com.
This press release contains “forwards-looking statements” relating to our
business. These forwards-looking statements. Other statements made by
us, are made based on our expectations and beliefs concerning future
events impacting us. Are subject to uncertainties and factors
(including those specified below) which are difficult to predict and, in
many instances, are beyond our control. As a result, our actual results
could differ materially from those expressed in or implied by any such
forwards-looking statements. These uncertainties and factors include (a)
global markets and general economic conditions, including uncertainties
surrounding the volatility in financial markets, the availability of
capital and the effect of changes in interest rates. The viability
of banks and other financial institutions. (b) the prices, supply and
capacity of raw materials, including assorted pigments, resins, solvents
and other natural gas- and oil-based materials. Packaging, including
plastic containers. Transportation services, including fuel
surcharges. (c) continued growth in demand for our products. (d) legal,
environmental and litigation risks inherent in our construction and
chemicals businesses and risks related to the adequacy of our insurance
coverage for such matters. (e) the effect of changes in interest rates.
(f) the effect of fluctuations in currency exchange rates upon our
foreign operations. (g) the effect of non-currency risks of investing in
and conducting operations in foreign countries, including those relating
to domestic and international political, social, economic and regulatory
factors. (h) risks and uncertainties associated with our ongoing
acquisition and divestiture activities. (i) risks related to the
adequacy of our contingent liability reserves. (j) other risks
detailed in our filings with the Securities and Exchange Commision,
including the risk factors set forth in our Annual Report on Form 10-K
for the year ended May 31, 2017, as the same may be updated from time to
time. We don't undertake any obligation to publicly update or revise
any forwards-looking statements to reflect future events, information or
circumstances that arise after the date of this release.