Supplement No.22

Filed Pursuant to Rule 424(b)(3) and Rule 424(c)
Registration Statement No. 333-196235
Registration Statement No. 333-199817

February 2, 2015

PROSPECTUS SUPPLEMENT NO. 22 TO THE JUNE PROSPECTUS (AS DEFINED BELOW)

PROSPECTUS SUPPLEMENT NO. 10 TO THE NOVEMBER PROSPECTUS (AS DEFINED BELOW)

 

LOGO

14,825,000 Shares of Common Stock

This prospectus supplement amends our prospectus dated June 19, 2014, as supplemented on July 15, 2014, July 21, 2014, August 6, 2014, August 8, 2014, September 26, 2014, October 1, 2014, October 8, 2014, October 21, 2014, October 30, 2014, November 4, 2014, November 6, 2014, November 17, 2014, November 21, 2014, December 8, 2014, December 12, 2014, January 2, 2015, January 12, 2015, January 26, 2015 and January 30, 2015 (the “June Prospectus”) to allow the selling stockholders named in the June Prospectus (the “June Selling Stockholders”) to resell, from time to time, up to 14,825,000 shares of our common stock. The shares of our common stock covered by the June Prospectus (the “June Shares”) were issued by us to the June Selling Stockholders in a private placement on May 20, 2014, as more fully described in the June Prospectus.

25,465,024 Shares of Common Stock

This prospectus supplement also amends our prospectus dated November 12, 2014, as supplemented on November 17, 2014, November 21, 2014, December 8, 2014, December 12, 2014, January 2, 2015, January 12, 2015, January 26, 2015 and January 30, 2015 (the “November Prospectus,” and together with the June Prospectus, the “Prospectuses”) to allow the selling stockholders named in the November Prospectus (the “November Selling Stockholders,” and together with the June Selling Stockholders, the “Selling Stockholders”) to resell, from time to time, up to 25,465,024 shares of our common stock. The shares of our common stock covered by the November Prospectus (the “November Shares,” and together with the June Shares, the “Shares”) were issued by us to the November Selling Stockholders in a private placement on October 8, 2014 and November 6, 2014, as more fully described in the November Prospectus.

This prospectus supplement is being filed to include the information set forth in our Current Report on Form 8-K/A filed with the Securities and Exchange Commission (the “SEC”) on January 30, 2015, which is set forth below. This prospectus supplement should be read in conjunction with the Prospectuses, which are to be delivered with this prospectus supplement.

Our shares of common stock are listed on the New York Stock Exchange (the “NYSE”) under the ticker symbol “PAH.” The closing sale price on the NYSE for our shares of common stock on January 30, 2015 was $21.00 per share.

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012.

Investing in our common stock involves risks. You should carefully consider the risks that we have described in “Risk Factors” beginning on pages 6 and 19 of the June Prospectus and November Prospectus, respectively, and under similar headings in any amendments or supplements to the Prospectuses, before investing in the Shares.

Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if the Prospectuses or this prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.

You should rely only on the information contained in the Prospectuses, this prospectus supplement or any future prospectus supplement or amendment. Neither we nor the Selling Stockholders have authorized anyone to provide you with different information. The Selling Stockholders are not making an offer of their Shares in any state where such offer is not permitted.

The date of this Prospectus Supplement is February 2, 2015.


 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K/A

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): January 12, 2015

 

 

Platform Specialty Products Corporation

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-36272   37-1744899

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

5200 Blue Lagoon Drive

Suite 855

Miami, Florida

  33126
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s telephone number, including area code: (203) 575-5850

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


This Amendment No. 1 on Form 8-K/A (this “Amendment No.1”) is being filed to amend the Current Report on Form 8-K filed by Platform Specialty Products Corporation (“Platform”) with the Securities and Exchange Commission (the “SEC”) on January 12, 2015 (the “Original Form 8-K”).

 

Item 8.01 Other Events

As previously disclosed in a Current Report on Form 8-K filed with the SEC on November 3, 2014, Platform completed the previously-announced acquisition of the agrochemicals business, Chemtura AgroSolutions, of Chemtura Corporation, a Delaware corporation (“Chemtura”) pursuant to the Stock and Asset Purchase Agreement dated April 16, 2014, between Platform and Chemtura (the “CAS Acquisition”).

Platform filed the Original Form 8-K with Platform’s unaudited pro forma combined consolidated balance sheet of Platform as of September 30, 2014 and the related unaudited pro forma combined consolidated statement of operations of Platform for the nine-month period ended September 30, 2014 and the year ended December 31, 2013, in each case giving effect on a pro forma basis to the CAS Acquisition, the previously-announced proposed acquisition by Platform of Arysta LifeScience Limited (the “Arysta Acquisition”) and the related financings (the “Pro Forma Financial Information”). For the year ended December 31, 2013, such pro forma financial information was also giving effect to the acquisition of MacDermid Holdings, LLC completed on October 31, 2013 (the “MacDermid Acquisition”) and the related financings.

The purpose of this Amendment No. 1 is to amend the Original Form 8-K by filing revised Pro Forma Financial Information reflecting a $600 million increase of the aggregate principal amount of 6.500% senior notes due 2022 denominated in U.S. Dollars being offered in Platform’s previously-announced private offering of senior notes, and a $500 million decrease of the maximum borrowings under Platform’s incremental term loan denominated in U.S. Dollars being sought through the syndication process relating to the financing of a portion of the acquisition consideration and related fees and expenses of the Arysta Acquisition.

A copy of the revised Pro Forma Financial Information is attached hereto as Exhibit 99.1 and is incorporated by reference in this Item 8.01. Other than as set forth above, no other changes have been made to the Original Form 8-K. This Amendment No. 1 speaks as of the filing date of the Original Form 8-K, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way disclosures made in the Original Form 8–K, except as stated above.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit
Number

  

Exhibit Title

99.1    Revised unaudited pro forma combined consolidated balance sheets of Platform as of September 30, 2014 and related revised unaudited pro forma combined consolidated statement of operations of Platform for the nine-month period ended September 30, 2014 and the year ended December 31, 2013, in each case giving effect on a pro forma basis to the CAS Acquisition, the Arysta Acquisition and the related financings. For the year ended December 31, 2013, such pro forma financial information is also giving effect to the completed MacDermid Acquisition and the related financings.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

PLATFORM SPECIALTY PRODUCTS CORPORATION
January 30, 2015 By:

/s/ Frank J. Monteiro

Name: Frank J. Monteiro
Title: Senior Vice President and Chief Financial Officer


Exhibit Index

 

Exhibit
Number

  

Exhibit Title

99.1    Revised unaudited pro forma combined consolidated balance sheets of Platform as of September 30, 2014 and related revised unaudited pro forma combined consolidated statement of operations of Platform for the nine-month period ended September 30, 2014 and the year ended December 31, 2013, in each case giving effect on a pro forma basis to the CAS Acquisition, the Arysta Acquisition and the related financings. For the year ended December 31, 2013, such pro forma financial information is also giving effect to the completed MacDermid Acquisition and the related financings.


Exhibit 99.1

UNAUDITED PRO FORMA FINANCIAL INFORMATION

On October 31, 2013, Platform Specialty Products Corporation (“Platform,” “we,” “us,” “our” or the “Company”) indirectly acquired substantially all of the outstanding equity of MacDermid, Incorporated (“MacDermid”) for approximately $1.8 billion (including the assumption of approximately $754 million of indebtedness, consisting primarily of MacDermid’s first lien credit facility), plus (i) up to $100 million of contingent consideration tied to achieving certain EBITDA and stock trading price performance metrics over a seven year period following the closing of this acquisition and (ii) an interest in certain MacDermid pending litigation (the “MacDermid Acquisition”).

At the closing of the MacDermid Acquisition on October 31, 2013, we paid approximately $923 million in cash and issued approximately $100 million of new equity. The equity issued primarily consisted of shares of common stock of a then wholly-owned subsidiary of Platform that may be exchanged for shares of our common stock at future specified dates beginning one year after the closing. In addition, we acquired the remaining 3% of MacDermid in March 2014, pursuant to the terms of an Exchange Agreement, dated October 25, 2013, between us and the fiduciaries of the MacDermid, Incorporated Profit Sharing and Employee Savings Plan (the “401K Plan”). Most of the 401K Plan participants received shares of our common stock for their interests in MacDermid. We funded the cash portion of the purchase price and related transaction expenses with a combination of available cash on hand and approximately $137 million of proceeds from a warrant exchange offer.

On November 3, 2014, we completed the acquisition of certain legal entities and other assets and liabilities that comprise the Chemtura AgroSolutions business (“CAS”) of Chemtura Corporation, a Delaware corporation (“Chemtura”) for approximately $1.04 billion, consisting of $990 million in cash, after certain post-closing working capital and other adjustments, plus 2,000,000 shares of our common stock (the “CAS Shares”) and the assumption of certain liabilities by Platform (the “CAS Acquisition”). We funded the cash portion of the purchase price and related transaction expenses of the CAS Acquisition with a combination of available cash on hand and borrowings under an increase in term loans of approximately $389 million (approximately $259 million of which is denominated in Euros), $60 million under the U.S. Dollar revolving credit facility and €55 million ($69 million based on the September 30, 2014 exchange rate of $1.26 per €1.00) under the multicurrency revolving credit facility pursuant to our credit agreement, as amended and restated (the “Amended and Restated Credit Agreement”).

On October 20, 2014, we entered into a share purchase agreement (the “Arysta Acquisition Agreement”) pursuant to which we agreed to acquire all of the outstanding common stock of Arysta LifeScience Limited (“Arysta”) for approximately $3.51 billion, consisting of $2.91 billion of cash, subject to working capital and other adjustments, and $600 million of new Series B Convertible Preferred Stock (the “Arysta Acquisition”). We currently expect to fund the cash portion of the purchase price and related transaction expenses of the Arysta Acquisition through a combination of available cash on hand, which includes, but is not limited to, the net proceeds from our underwritten registered public offering of 16,445,000 shares of our common stock completed on November 17, 2014 at a public offering price of $24.50 per share, raising gross proceeds of approximately $403 million (the “Public Offering”), our previously-announced offering of an aggregate principal amount of $1.52 billion of senior notes (the “Notes”), and $600 million of borrowings under first lien incremental term loans (the “Incremental Term Debt”). The Notes offering is subject to market conditions and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering. To the extent we issue less than $1.52 billion of Notes, we may make borrowings pursuant to a commitment letter (the “Debt Commitment Letter”) entered into on October 20, 2014 with Barclays Bank PLC, Credit Suisse AG, Cayman Islands Branch, Credit Suisse Securities (USA) LLC, Nomura Corporate Funding Americas, LLC, Nomura Securities International, Inc., UBS AG, Stamford Branch and UBS Securities LLC (collectively, the “Commitment Parties”) for (i) up to $1.6 billion of first lien incremental term loans (the “Term Facility”) to be incurred under our Amended and Restated Credit Agreement and (ii) senior unsecured bridge loans (the “Senior Bridge Facility” and together with the Term Facility, the “Facilities” in an aggregate principal amount of $750 million, for the purposes of financing the proposed Arysta Acquisition and the fees and expenses in connection therewith, on the terms and subject to the conditions set forth in the Debt Commitment Letter. The Commitment Parties’ obligation to provide the Facilities is subject to a number of customary conditions precedent. Furthermore, we are under no obligation to borrow under the Facilities and we anticipate seeking a number of alternative financings for the proposed Arysta Acquisition in lieu of the Facilities, including, but not limited to, equity or debt offerings and other borrowings under our Amended and Restated Credit Agreement.

The unaudited pro forma condensed combined statements of operations for the nine months and twelve months ended September 30, 2014 and for the year ended December 31, 2013 give effect to the MacDermid Acquisition, the CAS Acquisition and the Arysta Acquisition as if they had been consummated on January 1, 2013. The unaudited pro forma condensed combined balance sheet as of September 30, 2014 gives effect to the CAS Acquisition and the proposed Arysta Acquisition as if they had been consummated on September 30, 2014.

References herein to “Predecessor 2013 Period” refer to the ten-month period from January 1, 2013 through October 31, 2013. References herein to “Successor 2013 Period” refer to the period from April 23, 2013 (inception) through December 31, 2013. References herein to “Predecessor 2013 Nine-Month Period” refer to the period from January 1, 2013 to September 30, 2013. References herein to “Successor 2014 Nine-Month Period” refer to the period from January 1, 2014 to September 30, 2014.


The following unaudited pro forma condensed consolidated balance sheet as of September 30, 2014 and the unaudited pro forma condensed consolidated statement of operations for the nine months ended September 30, 2014 were derived from our unaudited consolidated financial statements and the unaudited combined and consolidated statement of operations of CAS and Arysta, respectively. The following unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2013 (inclusive of both the Successor 2013 and Predecessor 2013 Periods) were derived from our consolidated statement of operations and the audited combined and consolidated statement of operations of CAS and Arysta, respectively. The following unaudited pro forma condensed consolidated statement of operations for the twelve months ended September 30, 2014 has been calculated (i) for CAS and Arysta, by adding the unaudited nine months ended September 30, 2014 to the audited year ended December 31, 2013 and subtracting the unaudited nine months ended September 30, 2013 statement of operations, (ii) for Platform, by adding the unaudited Successor 2014 Nine-Month Period to the audited Successor 2013 Period and subtracting the unaudited period from April 23, 2013 (inception) to September 30, 2013, and (iii) for MacDermid, by subtracting the unaudited Predecessor 2013 Nine-Month Period from the audited Predecessor 2013 Period. The unaudited pro forma statements of operations and balance sheet do not reflect our acquisition of Percival S.A., including Percival S.A.’s agrochemical business, Agriphar, completed on October 1, 2014 (the “Agriphar Acquisition”) or the related financing, because the Agriphar Acquisition is not significant as defined by Rule 1-02(w) of Regulation S-X. The unaudited pro forma condensed consolidated financial information presented below is not necessarily indicative of future results and should be read in conjunction with the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements included in our annual report on Form 10-K for the fiscal year ended December 31, 2013 and our quarterly reports on Form 10-Q for the fiscal quarters ended June 30, 2014 and September 30, 2014, “CAS Management’s Discussion of Operations and Cash Flows” and “Arysta Management’s Discussion of Operations and Cash Flows,” CAS’s combined financial statements, Arysta’s consolidated financial statements and the respective notes thereto filed as exhibits to current reports on Form 8-K filed on January 12, 2015.


The pro forma adjustments are described in the accompanying notes and include the following:

 

    The preliminary allocation of the purchase price to the CAS balance sheet as shown below:

 

(in millions)

      

Current assets

   $ 318   

Identifiable intangible assets

     435   

Goodwill

     379   

Property, plant, and equipment

     19   

Other long-term assets

     6   
  

 

 

 

Total assets

$ 1,157   

Current liabilities

  74   

Other liabilities

  41   
  

 

 

 

Total liabilities

$ 115   
  

 

 

 

Total consideration

$ 1,042   
  

 

 

 

 

    The preliminary allocation of the purchase price to the Arysta balance sheet as shown below:

 

(in millions)

      

Current assets

   $ 1,165   

Identifiable intangible assets

     1,610   

Goodwill

     1,867   

Property, plant, and equipment

     77   

Other long-term assets

     82   
  

 

 

 

Total assets

$ 4,801   

Current liabilities

  573   

Other liabilities

  543   
  

 

 

 

Total liabilities

$ 1,116   

Noncontrolling interest

  63   
  

 

 

 

Total liabilities and noncontrolling interest

$ 1,179   
  

 

 

 

Total consideration

$ 3,622   
  

 

 

 

The Company has not completed the detailed valuations necessary to estimate the fair value of the assets and the liabilities acquired in the CAS Acquisition, the Arysta Acquisition, and the related allocations of purchase price. Additionally, a final determination of the fair value of assets acquired and liabilities acquired will be based on the actual net tangible and intangible assets and liabilities of CAS and Arysta that exist as of the dates of the CAS Acquisition, if and when completed and the Arysta Acquisition. Accordingly, the pro forma purchase price adjustments are preliminary and are subject to further adjustments as additional information becomes available and as additional analyses are performed. As the final valuations are performed, increases or decreases in the fair value of relevant balance sheet amounts and their useful lives will result in adjustments, which may be material, to the balance sheet and/or the statement of operations.


Pro forma adjustments to historical financial information are subject to assumptions described in the notes following the unaudited pro forma financial statements. Management believes that these assumptions and adjustments are reasonable and appropriate under the circumstances and are factually supported based on information currently available. The principal adjustments consist of the following:

 

    the completion of the MacDermid Acquisition, the CAS Acquisition, and the Arysta Acquisition for the statements of operations, and the completion of the CAS Acquisition and the Arysta Acquisition for the balance sheet, in each case because the MacDermid Acquisition is included in the condensed consolidated balance sheet as of September 30, 2014;

 

    borrowings under the Amended and Restated Credit Agreement;

 

    the issuance of 25.5 million shares of common stock in the October/November Private Placement;

 

    the issuance of 16.4 million shares of common stock in the Public Offering;

 

    the anticipated financing related to the Arysta Acquisition in the form of the Notes issued in this offering and the Incremental Term Debt, which is backed by the financing available pursuant to the Debt Commitment Letter (the “Bridge Financing”);

 

    the amendment to and assumption of MacDermid’s first lien credit facility for the MacDermid Acquisition and the amendment to such facility pursuant to the Amended and Restated Credit Agreement in connection with the CAS Acquisition; and

 

    an adjustment to the results of operations to remove Platform’s recording of a one-time, non-cash expense of approximately $172 million upon the closing of the MacDermid Acquisition, which represents the fair value of the founder preferred dividend rights at that time, as this will not have an ongoing impact on the statement of operations. Future dividends payable in common stock will be recorded in equity.

The unaudited pro forma condensed consolidated financial statements are for illustrative and informational purposes only and are not intended to represent, or be indicative of, what our financial position or results of operations would have been had the CAS Acquisition or the proposed Arysta Acquisition occurred on the dates indicated. The unaudited pro forma condensed consolidated financial information also should not be relied upon as a representation of our future performance.


PLATFORM SPECIALTY PRODUCTS CORPORATION

UNAUDITED PRO FORMA BALANCE SHEET AS OF SEPTEMBER 30, 2014

 

($ Thousands)

Platform
(Historical)
  CAS
(Historical)
  Arysta
(Historical)
  CAS
Adjustments
  Arysta
Adjustments
  Notes   Term
Debt
  Pro forma
Balance Sheet
 

ASSETS

Current assets:

Cash and cash equivalents

$ 281,676    $ 5,240    $ 186,264    $ 516,355   CA  $      $      $      $     
  651,315   CB    (126,264 ) AA 
  (4,104 ) CC    (2,910,000 ) AB    593,000   TA 
  (691,220 ) CD    386,801   AC    1,494,400  NA    (9,000 ) TB    374,463   

Restricted cash

  315,000      —        —        (315,000 ) CD    —     

Accounts receivable, net

  145,095      182,985      668,627      996,707   

Inventories

  79,325      110,744      287,447      29,000   CE 
  (25,583 ) CF    75,000   AD    555,933   

Prepaid purchase price

  63,854      —        —        63,854   

Prepaid expenses and other current assets

  26,754      15,779      73,517      (6,000 ) AE 
  25,638   AF 
  2,457   AG    138,145   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total current assets

  911,704      314,748      1,215,855      160,763      (2,552,368   1,494,400      584,000      2,129,102   

Property, plant, and equipment, net

  133,942      24,010      77,250      (4,546 ) CG    230,656   

Goodwill

  971,678      —        769,799      340,568   CH    (769,799 ) AH 
  38,668   CI    1,510,457   AI 
  356,427   AJ    3,217,798   

Intangible assets, net

  664,920      28,732      512,158      (28,732 ) CJ    (512,158 ) AK 
  435,000   CK    1,610,000   AL    2,709,920   

Investments in non-consolidated entities

  —        1,961      —        (1,961 ) CL    —     

Other assets

  47,376      5,349      82,612      10,530   CC    26,600  NA    6,550   TB    179,017   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

TOTAL ASSETS

$ 2,729,620    $ 374,800    $ 2,657,674    $ 950,290    $ (357,441 $ 1,521,000    $ 590,550    $ 8,466,493   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Current portion of long-term debt

  7,550      —        39,730      3,890   CM 
  129,300   CA    (13,261 ) AM    6,000   TC    173,209   

Accounts payable, accrued expenses, and other

  133,760      73,705      546,848      (6,000 ) AE    748,313   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total current liabilities

  141,310      73,705      586,578      133,190      (19,261   —        6,000      921,522   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Long-term debt

  738,013      —        1,754,567      387,055   CA    593,000   TA 
  (3,890 ) CM    (1,754,567 ) AM    1,521,000  NA    (6,000 ) TC    3,229,178   

Long-term contingent consideration

  60,900      —        —        60,900   

Other long-term liabilities

  209,815      2,420      176,320      38,668   CI    356,427   AJ 
  25,638   AF 
  10,000   AO 
  2,457   AG 
  190,411   AN    1,012,156   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

TOTAL LIABILITIES

  1,150,038      76,125      2,517,465      555,023      (1,188,895   1,521,000      593,000      5,223,756   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

STOCKHOLDERS’ EQUITY

Preferred shares—Class A

  20      —        —        20   

Preferred shares—Class B

  —        —        —        6   AN    6   

Common shares

  1,353      —        —        20   CN 
  255   CB    164   AC   1,792   

Additional paid in capital

  1,703,407      —        1,065,779      51,980   CN    (1,065,779 ) AP 
  651,060   CB    521,954   AN 
  386,637   AC    3,315,038   

Retained deficit

  (190,145   —        (847,218   (1,074 ) CC    857,218   AP 
  (8,299 ) CD    (10,000 ) AO    (2,450 ) TB    (201,968

Accumulated other comprehensive income

  (33,440   —        (111,382   111,382   AP    (33,440

Parent net investment

  —        298,675      —        (298,675 ) CO    —     
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total stockholders’ equity

  1,481,195      298,675      107,179      395,267      801,582      —        (2,450   3,081,448   

Noncontrolling interests

  98,387      33,030      29,872   AQ    161,289   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total equity

  1,579,582      298,675      140,209      395,267      831,454      —        (2,450   3,242,737   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total liabilities and stockholders’ equity

$ 2,729,620    $ 374,800    $ 2,657,674    $ 950,290    $ (357,441 $ 1,521,000    $ 590,550    $ 8,466,493   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 


PLATFORM SPECIALTY PRODUCTS CORPORATION

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014

 

  Platform
(Historical)
  CAS
(Historical) (1)
  Arysta
(Historical) (2)
  MacDermid
Adjustments
  CAS
Adjustments
  Arysta
Adjustments
  Anticipated Financing (3)   Pro forma
Consolidated
 
Notes   Term Debt  
($ thousands except per share data)                                    

Net sales

$ 569,640    $ 353,801    $ 1,062,212    $      $      $      $      $      $ 1,985,653   

Cost of sales

  285,507      212,651      666,497      (11,956 ) MA    1,050   CP    1,153,749   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

  284,133      141,150      395,715      11,956      (1,050   —        —        —        831,904   

Operating expenses:

                 

Selling, technical, general, and administrative

    231,737        62,212        261,859          (1,040 ) CQ         
            (670 ) CR         
            (9,600 ) CS      (9,245 ) AR       
            (4,483 ) CT      (46,323 ) AS       
            46,178   CU      124,500   AT          655,125   

Research and development

    18,464        7,753        6,710                  32,927   

Restructuring

    971        —          —                    971   

Equity loss (income)

    —          (69     —            69   CL            —     

Other

    —          —          14,712                  14,712   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expense

  251,172      69,896      283,281      —        30,454      68,932      —        —        703,735   

Operating profit

  32,961      71,254      112,434      11,956      (31,504   (68,932   —        —        128,169   

Other (expense) income:

Interest, net

  (23,375   (185   (72,743   20   CV    73,751   AU 
  (16,916 ) CW    (75,277 ) BB    (27,389 ) TD    (142,114

Other (expense) income, net

  (3,671   6,137      (20,028   (17,562
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  (27,046   5,952      (92,771   —        (16,896   73,751      (75,277   (27,389   (159,676

(Loss) income before income taxes and non-controlling interests

  5,915      77,206      19,663      11,956      (48,400   4,819      (75,277   (27,389   (31,507

Income tax benefit (provision)

  3,542      (38,072   (54,257   (4,226 ) MK    17,714   CX    (1,464 ) AV    22,877   BC    8,324   TE    (45,562
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

  9,457      39,134      (34,594   7,730      (30,686   3,355      (52,400   (19,065   (77,069

Net (income) loss attributable to non-controlling interest

  (5,380   —        (6,977   (12,357
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income attributable to common shareholders

$ 4,077    $ 39,134    $ (41,571   7,730    $ (30,686 $ 3,355    $ (52,400 $ (19,065 $ (89,426
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) Earnings Per Share

Basic

$ 0.03      n/a      n/a      n/a      n/a      n/a      n/a      n/a    $ (0.54

Diluted

$ 0.03      n/a      n/a      n/a      n/a      n/a      n/a      n/a    $ (0.54

Weighted average shares outstanding (millions)

Basic

  124      n/a      n/a      n/a      n/a      n/a      n/a      n/a      166  SA 

Diluted

  141      n/a      n/a      n/a      n/a      n/a      n/a      n/a      166  SB 

 

(1) The historical statement of operations of CAS presents cost of goods sold (excluding depreciation) of $206,821 as an operating expense. For purposes of this pro forma, this amount plus $5,830 of related depreciation is presented as cost of sales to present gross profit for the acquired business.
(2) Historical Arysta amounts presented in US GAAP presentation based upon its IFRS basis financial statements. Adjustments to convert the IFRS basis to US GAAP basis are included in the Arysta adjustments column.
(3) Platform anticipates financing a portion of the cash consideration for the Arysta Acquisition with the net proceeds of this offering and the Incremental Term Debt as reflected in this pro forma balance sheet. Platform also has Bridge Financing available; however, it believes it is unlikely that the Bridge Financing will be drawn upon. If Platform is unavailable to finance a portion of the cash consideration for Arysta as anticipated, the net loss to common shareholders on a pro forma basis may increase by up to approximately $3 million. The amount of loss is dependent on several factors, including the terms of the Bridge Financing and whether alternative sources of equity or debt financing are available.


PLATFORM SPECIALTY PRODUCTS CORPORATION

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2013

 

  As Reported   MacDermid
Adjustments
  Combined
Successor and
Predecessor
Income
Statement
  CAS
(Historical) (3)
  Arysta
(Historical) (4)
  CAS
Adjustments
  Arysta
Adjustments
  Anticipated Financing (5)   Pro forma
Consolidated
 
Platform
(Historical) (1)
  MacDermid
(Historical) (2)
  Notes   Term Debt  
  Successor      Predecessor   
($ thousands except per
share data)
                                           

Net sales

$ 118,239    $ 627,712    $      $ 745,951    $ 449,255    $ 1,508,925    $      $      $      $      $ 2,704,131   

Cost of sales

  82,587      304,875      (23,912 ) MA 
    3,226   MB    366,776      282,673      979,335      1,400   CP    1,630,184   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

  35,652      322,837      20,686      379,175      166,582      529,590      (1,400   —        —        —        1,073,947   
 

Operating expenses:

 

Selling, technical, general, and administrative

  54,521      207,554      (247 ) MC    71,778      338,893   
    (9,317 ) MD 
    (32,121 ) ME    (2,834 ) CQ 
    (31,253 ) MF    (753 ) CR 
    57,500   MG    (6,796 ) CT    (56,959 ) AS 
    626   MB    247,263      61,570   CU    166,000   AT    818,162   

Non-cash charge related to preferred stock dividend rights

  172,006      —        (172,006 ) MH    —        —        —        —     

Research and development

  3,995      19,898      (24 ) MB    23,869      13,243      8,866      45,978   

Restructuring

  762      3,636      4,398      (271   —        4,127   

Equity income

  —        —        —        (1,020   (783   1,020   CL    (783

Other

  —        —        —        —        45,030      45,030   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expense

  231,284      231,088      (186,842   275,530      83,730      392,006      52,207      109,041      —        —        912,514   
 

Operating (loss) profit

  (195,632   91,749      207,528      103,645      82,852      137,584      (53,607   (109,041   —        —        161,433   

Other (expense) income:

 

Interest, net

  (5,372   (45,929   51,776   MI    (208   (110,302   185   CV 
    (30,631 ) MJ    (30,156   (22,555 ) CW    113,638   AU    (100,369 ) BB    (36,519 ) TD    (186,286 )  

Debt extinguishment

  —        (18,788   (18,788   —        —        —        —        (18,788

Other (expense) income, net

  (440   (557   (997   (6,548   (61,020   —        —        (68,565
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  (5,812   (65,274   21,145      (49,941   (6,756   (171,322   (22,370   113,638      (100,369   (36,519   (273,639

(Loss) income before income taxes, non-controlling interests, and accrued payment-in-kind dividends on cumulative preferred shares

  (201,444   26,475      228,673      53,704      76,096      (33,738   (75,977   4,597      (100,369   (36,519   (112,206

Income tax benefit (provision)

  5,819      (12,961   (16,014 ) MK    (23,156   (29,241   (47,593   30,574   CX    (1,397 ) AV    30,502   BC    11,098   TE    (29,213
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

  (195,625   13,514      212,659      30,548      46,855      (81,331   (45,403   3,200      (69,867   (25,421   (141,419

Net loss (income) attributable to non-controlling interests

  1,403      (295   (860 ) ML    248      (9,194   (8,946
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income attributable to stockholders

  (194,222   13,219      211,799      30,796      46,855      (90,525   (45,403   3,200      (69,867   (25,421   (150,365

Accrued payment-in-kind dividend on cumulative preferred shares

  —        (22,454   22,454   MM    —        —        —        —        —        —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income attributable to common stockholders

$ (194,222 $ (9,235 $ 234,253    $ 30,796    $ 46,855    $ (90,525 $ (45,403 $ 3,200    $ (69,867 $ (25,421 $ (150,365
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) Earnings Per Share

 

Basic

$ (2.10   n/a      n/a      n/a      n/a      n/a      n/a      n/a      n/a      n/a    $ (1.01

Diluted

$ (2.10   n/a      n/a      n/a      n/a      n/a      n/a      n/a      n/a      n/a    $ (1.01
 

Weighted average shares outstanding (millions)

 

Basic

  93      n/a      n/a      n/a      n/a      n/a      n/a      n/a      n/a      n/a      148  SC 

Diluted

  93      n/a      n/a      n/a      n/a      n/a      n/a      n/a      n/a      n/a      148  SD 

 

(1) Historical Platform amounts included in the audited income statement of Platform reflects operations for the period from April 23, 2013 (date of inception) through December 31, 2013 (Successor Period).
(2) Historical MacDermid amounts included in the audited income statement of MacDermid reflects operations for the period from January 1, 2013 through October 31, 2013, date of acquisition by Platform (Predecessor Period).
(3) The historical statement of operations of CAS presents cost of goods sold (excluding depreciation) of $275,106 as an operating expense. For purposes of this pro forma, this amount plus $7,567 of related depreciation is presented as cost of sales to present gross profit for the acquired business.
(4) Historical Arysta amounts presented in US GAAP presentation based upon its IFRS basis financial statements. Adjustments to convert the IFRS basis to US GAAP basis are included in the Arysta adjustments column.
(5) Platform anticipates financing a portion of the cash consideration for the Arysta Acquisition with the net proceeds of this offering and the Incremental Term Debt as reflected in this pro forma balance sheet. Platform also has Bridge Financing available; however, it believes it is unlikely that the Bridge Financing will be drawn upon. If Platform is unavailable to finance a portion of the cash consideration for Arysta as anticipated, the net loss to common shareholders on a pro forma basis may increase by up to approximately $5 million. The amount of loss is dependent on several factors, including the terms of the Bridge Financing and whether alternative sources of equity or debt financing are available.


PLATFORM SPECIALTY PRODUCTS CORPORATION

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS

FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 2014

 

  As Reported   MacDermid
Adjustments
  Pro Forma
Combined
Successor
and
Predecessor
  CAS
(Historical)
(3) (4)
  Arysta
(Historical)
(3) (5)
  CAS
Adjustments
  Arysta
Adjustments
      Anticipated Financing (6)     Pro forma
Consolidated
 
Platform
(Historical) (1)
  MacDermid
(Historical) (2)
  Notes   Term
Debt
 
  Successor      Predecessor   
($ thousands except per
share data)
                                           

Net sales

$ 687,879      67,155    $      $ 755,034    $ 460,722    $ 1,536,205    $      $      $      $      $ 2,751,961   

Cost of sales

  368,094      33,145      (35,868 ) MA 
    269   MB    365,640      280,695      978,251      1,400   CP    1,625,986   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

  319,785      34,010      35,599      389,394      180,027      557,954      (1,400   —        —        —        1,125,975   
 

Operating expenses:

 

Selling, technical, general, and administrative

 
  281,388      43,149      (9,317 ) MD    79,997      359,460      (1,734 ) CQ 
    (27,661 ) ME    (703 ) CR 
    (2,242 ) MF    (9,600 ) CS    (9,245 ) AR 
    4,792   MG    (6,000 ) CT    (56,350 ) AS 
    52   MB    290,161      61,570   CU    166,000   AT    873,556   

Non-cash charge related to preferred stock dividend rights

  172,006      —        (172,006 ) MH    —        —        —        —     

Research and development

  22,459      2,394      (2 ) MB    24,851      12,413      10,112      47,376   

Restructuring

  1,733      1,746      3,479      11      —        3,490   

Equity loss (income)

  —        —        —        (3,224   —        3,224   CL    —     

Other

  —        —        —        —        59,673      59,673   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expense

  477,586      47,289      (206,384   318,491      89,197      429,245      46,757      100,405      —        —        984,095   
 

Operating profit

  (157,801   (13,279   241,983      70,903      90,830      128,709      (48,157   (100,405   —        —        141,880   

Other (expense) income:

 

Interest, net

  (28,827   (5,235   5,290   MI    58   CV 
    (2,553 ) MJ    (31,325   (237   (94,166   (22,555 ) CW    97,467   AU    (100,369 ) BB    (36,519 ) TD    (187,646

Other (expense) income, net

  (4,111   (152   (4,263   4,000      (89,674   (89,937
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  (32,938   (5,387   2,737      (35,588   3,763      (183,840   (22,497   97,467      (100,369   (36,519   (277,583

(Loss) income before income taxes and non-controlling interests

  (190,739   (18,666   244,720      35,315      94,593      (55,131   (70,654   (2,938   (100,369   (36,519   (135,703

Income tax benefit (provision)

  9,361      7,971      (17,120 ) MK    212      (51,516   (40,830   25,838   CX    893  AV    30,502   BC    11,098   TE    (23,803
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

  (181,378   (10,695   227,600      35,527      43,077      (95,961   (44,816   (2,045   (69,867   (25,421   (159,506

Net (income) loss attributable to non-controlling interest

  (3,977   24      (1,165 ) ML    (5,118   —        (8,836   (13,954
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income attributable to stockholders

  (185,355   (10,671   226,435      30,409      43,077      (104,797   (44,816   (2,045   (69,867   (25,421   (173,460

Accrued payment-in-kind dividend on cumulative preferred shares

  —        (354   354   MM    —        —        —        —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income attributable to common stockholders

$ (185,355   (11,025 $ 226,789    $ 30,409    $ 43,077    $ (104,797 $ (44,816 $ (2,045 $ (69,867 $ (25,421 $ (173,460
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) Earnings Per Share

 

Basic

  n/a      n/a      n/a      n/a      n/a      n/a      n/a      n/a      n/a      n/a    $ (1.05

Diluted

  n/a      n/a      n/a      n/a      n/a      n/a      n/a      n/a      n/a      n/a    $ (1.05
 

Weighted average shares outstanding (millions)

 

Basic

  n/a      n/a      n/a      n/a      n/a      n/a      n/a      n/a      n/a      n/a      166 SA 

Diluted

  n/a      n/a      n/a      n/a      n/a      n/a      n/a      n/a      n/a      n/a      166 SB 

 

(1) Historical Platform amounts include the audited income statement of its operations for the period from April 23, 2013 (date of inception) through December 31, 2013 (Successor Period) plus the unaudited statement of operations for the nine months ended September 30, 2014 less the unaudited statement of operations for the period April 23, 2013 (Inception) through September 30, 2013.
(2) Historical MacDermid amounts include its audited statement of operations for the period from January 1, 2013 through October 31, 2013 less the unaudited statement of operations for the nine months ended September 30, 2013.
(3) Historical CAS and Arysta amounts include their audited income statement of its operations for the year ended December 31, 2013 plus their unaudited statement of operations for the nine months ended September 30, 2014 less the unaudited statement of operations for the nine months ended September 30, 2013.
(4) If presented consistently with the historical financial statements of CAS, cost of good sold (excluding depreciation) would be $272,960. However, for purposes of this pro forma, this amount plus $7,735 of related depreciation is presented as cost of sales to present gross profit for the acquired business.
(5) Historical Arysta amounts presented in US GAAP presentation based upon its IFRS basis financial statements. Adjustments to convert the IFRS basis to US GAAP basis are included in the Arysta adjustments column.
(6) Platform anticipates financing a portion of the cash consideration for the Arysta Acquisition with the net proceeds of this offering and the Incremental Term Debt as reflected in this pro forma balance sheet. Platform also has Bridge Financing available; however, it believes it is unlikely that the Bridge Financing will be drawn upon. If Platform is unavailable to finance a portion of the cash consideration for Arysta as anticipated, the net loss to common shareholders on a pro forma basis may increase by up to approximately $5 million. The amount of loss is dependent on several factors, including the terms of the Bridge Financing and whether alternative sources of equity or debt financing are available.


CAS Adjustments

 

CA Reflects borrowings under the Amended and Restated Credit Agreement, including borrowings under our revolving credit facilities of approximately $129 million and borrowings under our term loans facilities of $389 million, to finance a portion of the cash purchase price of CAS, net of estimated original issue discount of $1.9 million.

 

CB Represents net proceeds from the October/November Private Placement, net of $0.34 million of issuance costs.

 

CC Reflects the deferred financing costs of $10.5 million, including $7.5 million as further described in Note CD, and expenses of $1.1 million related to the borrowings under the Amended and Restated Credit Agreement to finance a portion of the CAS purchase price and for access to an incremental $125 million of revolving line of credit obtained in conjunction with the CAS Acquisition.

 

CD Reflects the cash paid to the sellers as part of the consideration for the CAS Acquisition of $977.8 million, cash paid on behalf of the sellers for withholding tax of $12.0 million, and cash paid for fees and transfer taxes of $16.5 million, of which $0.7 million was reimbursed by the seller, $7.5 million is capitalized as deferred financing costs, as further described in Note CC, and $8.3 million is an expense.

 

CE Reflects management’s preliminary estimate of the profit in CAS inventory step-up to fair value as of September 30, 2014.

 

CF Reflects an estimate of the raw materials and work-in-process inventory retained by Chemtura following the closing of the CAS Acquisition, in conjunction with supply agreements entered into with Chemtura.

 

CG Reflects the net book value of land and buildings retained by Chemtura of $10.2 million offset by management’s preliminary estimate of the incremental fair value of purchased fixed assets of $5.6 million.

 

CH Reflects the preliminary estimated goodwill associated with the CAS Acquisition excluding the effect of deferred taxes (see Note CI). Such amount was calculated as the difference between the estimated allocation of purchase price to net tangible and intangible assets ($702 million) excluding the deferred tax liability calculated in Note CI and the total consideration paid for CAS ($1,042 million).

 

CI Reflects the estimated deferred tax liability associated with the temporary difference created by the preliminary step-up to fair value of intangible assets acquired of $110 million and other acquired tangible assets of $0.3 million. The remaining step-up of intangibles and tangible assets does not create a temporary difference.

 

CJ Reflects the elimination of the historical intangibles of CAS.

 

CK Reflects management’s preliminary estimated fair value of the intangible assets of CAS as of the closing of the CAS Acquisition:

 

(In thousands) Intangible Assets

      

Technology (7-10 years)

   $ 350,000   

Non compete agreement (3 years)

   $ 50,000   

Customer relationships (8-20 years)

   $ 35,000   

 

CL Reflects investments in and related earnings of unconsolidated subsidiaries of CAS not acquired with the CAS Acquisition.

 

CM Reflects the reclassification of the Amended and Restated Credit Agreement that amortizes within a year.

 

CN Reflects issuance of the CAS shares to the sellers as part of the consideration for the CAS Acquisition based upon the closing price per share of Platform common stock as of October 31, 2014 of $26.00.

 

CO Reflects the elimination of historical CAS equity.

 

CP Reflects depreciation expense to be recorded in conjunction with the estimated incremental fair value of purchased fixed assets.


CQ Reflects elimination of the cost of a Brazilian accounts receivable securitization program of CAS not acquired in the CAS Acquisition.

 

CR Reflects elimination of allocated office of the CEO and CFO costs.

 

CS Reflects the elimination of non-recurring CAS Acquisition-related expenses, including but not limited to financial advisory, legal and accounting fees, recorded during the nine months ended September 30, 2014.

 

CT Reflects the elimination of the historical amortization expenses on CAS’s intangible assets.

 

CU Reflects amortization expense to be recorded in conjunction with the estimated fair value of the intangible assets of CAS:

 

(In thousands) Intangible Assets

   Estimated
Fair Value
     Annual
Amortization
 

Technology (7-10 years)

   $ 350,000       $ 42,200   

Non compete agreement (3 years)

   $ 50,000       $ 16,670   

Customer relationships (8-20 years)

   $ 35,000       $ 2,700   

Annual amortization is calculated as estimated fair value divided by the calculated life of the related asset.

 

CV Reflects the elimination of interest expense related to debt not assumed from Chemtura in conjunction with the CAS Acquisition.

 

CW Reflects interest expense related to the indebtedness incurred under the Amended and Restated Credit Agreement that funded a portion of the cash purchase price for the CAS Acquisition comprised of the following:

 

    Interest on the incremental US Dollar borrowings under the first lien debt of $130 million at a rate of approximately 4.00% and on the Euro denominated first lien debt of $259 million equivalent at a rate of approximately 4.25% based on the terms of the Amended and Restated. These interest rates are based on an applicable margin of 3% applied to a LIBOR floor of 1% and are variable in nature. The pre-tax effect of a 1/8% change effective interest rate would be $0.5 million annually.

 

    Interest on the incremental borrowings of approximately $129 million under our revolving credit facilities at a rate of 5.25% for the portion under our U.S. Dollar revolving credit facility of $60 million and 3.23% for the portion under or multicurrency revolving credit facility of approximately €55 million ($69 million based on the September 30, 2014 exchange rate of $1.26 per €1.00).

 

    Amortization of estimated deferred financing fees of $1.5 million and estimated original issuance discount of $1.9 million for the first lien term debt over the six year term of the loan.

 

    Amortization of estimated deferred financing fees of $1.5 million for access to an incremental $125 million of revolving line of credit anticipated to be obtained in conjunction with the CAS Acquisition over the 4-year term of the facility.

 

CX Reflects income tax benefit (expense) related to the income (loss) before income taxes, non-controlling interests, and accrued payment-in-kind dividends on cumulative preferred shares generated by the pro forma adjustments. The tax rate applied is based upon the effective tax rate of CAS for the historical period presented of 38% for the year ended December 31, 2013 and 35% for the nine and twelve months ended September 30, 2014 based upon historical and estimated future effective tax rates. This rate were applied to acquisition costs, amortization, interest expense, and the earnings of unconsolidated subsidiaries not being acquired.

Arysta Adjustments

 

AA Reflects management’s estimate of the amount of cash that will be retained by the seller of Arysta.

 

AB Reflects the cash to be paid to the seller as part of the consideration for the Arysta Acquisition.

 

AC Reflects the issuance of 16.4 million shares of Platform common stock, $.01 par, for proceeds of $387 million, which is net of fees of $16.1 million.


AD Reflects management’s preliminary estimate of the profit in Arysta inventory step-up to fair value as of September 30, 2014.

 

AE As Arysta’s financial statements are prepared in accordance with IFRS, reflects management’s estimate of the offset of derivative asset and liabilities required pursuant to GAAP that is prohibited for IFRS.

 

AF As Arysta’s financial statements are prepared in accordance with IFRS, reflects management’s estimate of the offset of deferred tax assets and liabilities required pursuant to GAAP that is prohibited for IFRS.

 

AG As Arysta’s financial statements are prepared in accordance with IFRS, reflects management’s estimate of deferred taxes related to intercompany profits that are reclassified as current assets pursuant to GAAP.

 

AH Reflects the elimination of Arysta’s historical goodwill.

 

AI Reflects the preliminary estimated goodwill associated with Arysta excluding the effect of deferred taxes. Such amount was calculated as the difference between the estimated allocation of purchase price to net tangible and intangible assets ($2.1 billion) excluding the deferred tax liability calculated in Note AJ and the total consideration paid for Arysta ($3.6 billion).

 

AJ Reflects the estimated deferred tax liability associated with the preliminary step up to fair value of intangible assets, excluding goodwill related to acquisitions of stock of $1,098 million and other acquired tangible assets of $175 million based upon the effective tax rate of Platform for the nine months ended September 30, 2014.

 

AK Reflects the elimination of the historical intangibles at Arysta as of the closing of the proposed Arysta Acquisition.

 

AL Reflects management’s preliminary estimated fair value of the intangible assets of Arysta as of the closing of the Arysta Acquisition:

 

(In thousands) Intangible Assets

      

Trade names-indefinite lives

   $ 160,000   

Technology (7-10 years)

   $ 1,250,000   

Customer relationships (8-20 years)

   $ 200,000   

 

AM Reflects the elimination of debt not expected to be assumed in conjunction with the Arysta Acquisition.

 

AN Reflects the issuance of $600 million of Platform preferred stock, $1,000 par, that is convertible into Platform common stock plus cash for the deficit, if any, between the value of our common stock and $27.14, to the seller as part of the consideration for the proposed Arysta Acquisition. The cash feature represents an embedded derivative liability of $190 million. Accordingly, additional paid in capital is adjusted for the difference between the fair value of Platform’s common stock underlying the preferred stock of $522 million, which is based on Platform’s closing stock price of $23.61 as of December 1, 2014, less the par amount of the preferred stock. The purchase price including the valuation of the embedded derivative liability and preferred stock will be determined at closing. For every $1 change in our common stock price, the purchase price, goodwill, and equity changes by approximately $13 million.

 

AO As Arysta’s financial statements are reported in IFRS, reflects management’s estimate of uncertain tax positions pursuant to GAAP that is not required for IFRS.

 

AP Reflects elimination of Arysta historical equity which includes the $10 million adjustment in Note AO.

 

AQ Reflects management’s preliminary estimate of the fair value of the non-controlling interest of Arysta that is anticipated to remain outstanding subsequent to the proposed Arysta Acquisition.

 

AR Reflects the elimination of non-recurring Arysta Acquisition expenses, including but not limited to financial advisory, legal and accounting fees, recorded during the nine months ended September 30, 2014.

 

AS Reflects elimination of historical amortization expenses related to Arysta’s intangible assets.


AT Reflects amortization expense to be recorded in conjunction with the estimated fair value of the intangible assets of Arysta:

 

(In thousands) Intangible Assets

   Estimated
Fair Value
     Annual
Amortization
 

Trade names-indefinite lives

   $ 160,000       $ —     

Technology (7-10 years)

   $ 1,250,000       $ 150,700   

Customer relationships (8-20 years)

   $ 200,000       $ 15,300   

Annual amortization is calculated as estimated fair value divided by the calculated life of the related asset.

 

AU Reflects elimination of historical interest expense at Arysta for indebtedness not assumed at closing.

 

AV Reflects income tax benefit (expense) related to the income (loss) before income taxes, non-controlling interests, and accrued payment-in-kind dividends on cumulative preferred shares generated by the pro forma adjustments. The tax rate applied of 30% is based upon historical and estimated future effective tax rates.

Notes Adjustments

 

NA Reflects the anticipated issuance of $1.52 billion of Notes to fund a portion of the Arysta purchase price, net of deferred financing fees of $26.6 million.

 

NB Reflects the interest expense related to the Notes anticipated to be issued to fund a portion for the cash purchase price for the proposed Arysta Acquisition comprised of the following:

 

    Interest on the $1.52 billion of Notes anticipated to be issued.

 

    Amortization of estimated deferred financing fees of $26.6 million over the anticipated term of the Notes.

 

NC Reflects income tax benefit (expense) related to the income (loss) before income taxes, non-controlling interests, and accrued payment-in-kind dividends on cumulative preferred shares generated by the pro forma adjustments. The tax rate of 30% is based upon historical and estimated future effective tax rates.

Term Debt Adjustments

 

TA Reflects Incremental Term Debt to be issued to finance a portion of the cash purchase price of Arysta, net of estimated original issue discount of $7 million.

 

TB Reflects the deferred financing costs of $6.5 million and expenses of $2.5 million related to the anticipated Incremental Term Debt to finance a portion of the Arysta purchase price and for access to an incremental $125 million of revolving line of credit anticipated to be obtained in conjunction with the Arysta Acquisition.

 

TC Reflects the reclassification of the portion of the anticipated senior term debt to be issued to finance a portion of the cash purchase price of Arysta that amortizes within a year.

 

TD Reflects the interest expense related to the anticipated issuance of Incremental Term Debt to fund a portion of the cash purchase price of the proposed Arysta Acquisition comprised of the following

 

    Interest on the Incremental Term Debt. The pre-tax effect of a 1/8% change in effective interest rate would be $0.8 million annually.

 

    Amortization of estimated deferred financing fees of $6.5 million and estimated original issuance discount of $7 million over the anticipated terms of the senior term debt and the revolving line of credit.


Differential”), then the yield on the previously issued term debt will increase by the Yield Differential. The impact of this increase, in the event it occurs, is not reflected in this adjustment. For each 0.25% increase in the yield on previously issued term debt, annualized interest expense would increase by approximately $3.6 million and net losses would increase by approximately $2.5 million.

 

TE Reflects income tax benefit (expense) related to the income (loss) before income taxes, non-controlling interests, and accrued payment-in-kind dividends on cumulative preferred shares generated by the pro forma adjustments. The tax rate applied of 30% is based upon historical and estimated future effective tax rates.

MacDermid Adjustments

 

MA Reflects elimination of manufacturer’s profit in inventory adjustment in connection with the MacDermid Acquisition.

 

MB Reflects incremental depreciation expense in connection with fair value increases to fixed assets resulting from the MacDermid Acquisition.

 

MC Reflects elimination of stock based compensation expense for director options that vested upon closing of the MacDermid Acquisition.

 

MD Reflects elimination of Predecessor stock based compensation expense for awards that vested upon closing of the MacDermid Acquisition.

 

ME Reflects elimination of non-recurring MacDermid acquisition-related expenses, including but not limited to financial advisory, legal and accounting fees.

 

MF Reflects elimination of recorded amortization expenses on MacDermid’s intangible assets.

 

MG Reflects amortization expense associated with the estimated fair value of the intangible assets of MacDermid based on an outside valuation by a third party obtained by Platform subsequent to closing as follows:

 

(In thousands) Intangible Assets

   Estimated
Fair Value
     Annual
Amortization
 

Trade names-indefinite lives

   $ 70,800       $ —     

Technology (7-10 years)

   $ 164,200       $ 19,800   

Customer relationships (8-20 years)

   $ 494,000       $ 37,700   

Annual amortization is calculated as estimated fair value divided by the calculated life of the related asset.

 

MH Reflects Platform’s recording of a one-time, non-cash expense of $172 million upon the closing of the MacDermid Acquisition, which represents the fair value of the founder preferred share dividend rights at that time. As this will not have an ongoing impact on the statement of operations, it is presented as an adjustment in the pro forma statements of operations. This estimate was calculated using a Monte Carlo simulation that simulates the daily price of shares over the potential dividend period with an estimate of volatility and interest to arrive at an estimated fair value of future dividend payments as of October 31, 2013.

 

MI Reflects the elimination of recorded interest expense at MacDermid for indebtedness not assumed at closing.

 

MJ Reflects interest expense related to indebtedness assumed in the MacDermid Acquisition comprised of the following:

 

    Interest on the first lien debt of $753 million at a rate of approximately 4% based on the terms of the credit agreement. Such interest rate is based on an applicable margin of 3% applied to a LIBOR floor of 1% and is variable in nature. The pre-tax effect of a 1/8% change effective interest rate would be $0.9 million annually.


    Amortization of deferred financing fees of $1.8 million for the first lien term debt over the five year life of the loan.

 

    Interest on other assumed indebtedness ($44,000 of interest annually).

 

MK Reflects income tax benefit (expense) related to the income (loss) before income taxes, non-controlling interests, and accrued payment-in-kind dividends on cumulative preferred shares generated by the pro forma adjustments. The tax rate applied is based upon the estimated applicable statutory tax rates. The Company’s estimated United States statutory tax rate of approximately 38% was applied to interest expense in the United States, where the debt resides as well as to the portion of acquisition costs which were incurred in the United States and to stock compensation. Additionally, the applicable blended rates were applied to inventory, amortization, depreciation, and Predecessor stock compensation.

 

ML Reflects the non-controlling interest represented by equity interests in a subsidiary of Platform provided as a portion of the consideration of the MacDermid Acquisition. Such equity interest represents 6.76% of MacDermid multiplied by the pro forma MacDermid pro forma adjustments excluding the adjustments in Note MD, ME, and MH that relate to Platform expenses.

 

MM Reflects the elimination of dividends paid to sellers for an equity interest which has been repaid and eliminated in conjunction with the MacDermid Acquisition.

Weighted Average Share Adjustments

 

SA Represents the number of Platform ordinary shares outstanding at January 1, 2014 (which were converted into shares of Platform common stock upon our Domestication) plus 2 million shares of Platform common stock issued in exchange for the remaining outstanding equity interests of MacDermid owned by the 401K Plan during 2014, 16 million warrants exercised during 2014, 2 million shares issued in connection with the CAS Acquisition, 25.5 million shares issued or to be issued for general corporate purposes, and 16.4 million shares issued in connection with the Public Offering.

 

SB Represents the basic shares described in Note SA. Because the pro forma statement of operations reflects a loss, the amount excludes all potentially dilutive common stock.

 

SC Represents 88.5 million Platform ordinary shares issued in Platform’s initial public offering (which were converted into shares of Platform common stock upon our domestication) plus 14 million Platform ordinary shares (which were converted into shares of Platform common stock upon our domestication ) issued in connection with Platform’s warrant exchange offer (the proceeds of which were used to fund a portion of the cash consideration for the MacDermid Acquisition), 2 million shares of Platform common stock issued in exchange for the remaining outstanding equity interests of MacDermid owned by the 401K Plan, 2 million shares issued in connection with the CAS Acquisition, 25.5 million shares issued or to be issued for general corporate purposes, and 16.4 million shares issued in connection with the Public Offering.

 

SD Represents the number of basic shares as described in Note SC. Because the pro forma statement of operations reflects a loss, the amount excludes all potential dilutive common stock.