RPM Announces Agreement with Elliott Management on New Initiatives to Improve Operating and Financial Performance and Enhance Shareholder Value | Business Wire

MEDINA, Ohio–(BUSINESS WIRE)–RPM

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

creation.”

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.

About RPM

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,

Tremco,

illbruck,

Carboline,

Flowcrete,

Euclid

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,

DAP,

Zinsser,

Varathane

and Testors.

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,

Dryvit,

RPM

Wood Finishes, Mantrose-Haeuser,

Legend

Brands, Kop-Coat

and TCI.

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 bslifstein@rpminc.com.

Forward-Looking Statements

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.

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