Chase Corporation, a prominent global manufacturer of protective materials for high-reliability applications, has recently disclosed that it is set to be acquired by an affiliate of investment funds managed by KKR, a leading global investment firm. The all-cash transaction, which includes the assumption of debt, is valued at approximately $1.3 billion.
Under the terms of the definitive agreement, KKR will purchase all outstanding shares of Chase common stock for $127.50 per share in cash, presenting significant value to shareholders. The transaction’s value implies a valuation of around 13 times the trailing twelve-months EBITDA.
Shared Vision for Growth
Adam P. Chase, President, and Chief Executive Officer of Chase Corporation, expressed enthusiasm about the partnership, stating that KKR was the right strategic partner with strong cultural alignment and the necessary experience and resources to support Chase’s mission and drive future growth.
Josh Weisenbeck, a KKR Partner who leads the firm’s Industrials investment team, lauded Chase Corporation’s achievements over its nearly 80-year history. He emphasized the opportunity to support Chase in its next phase of growth, which includes developing innovative products, executing strategic acquisitions, and serving customers in thriving end-markets, such as electronics, fiber optics, and electric grid infrastructure.
KKR’s Track Record
KKR is making this investment through its North America Fund XIII, leveraging its extensive experience in investing in industrial businesses with technical and materials science capabilities. Notable examples of KKR’s prior investments in this space include Minnesota Rubber and Plastics, Charter Next Generation, and Hyperion Materials & Technologies.
Post-acquisition, KKR is committed to supporting Chase in creating an equity ownership program to enable all employees to share in the benefits of the company’s ownership. This strategic move is driven by the belief that employee engagement plays a crucial role in building stronger companies. KKR’s portfolio companies have previously awarded billions of dollars of total equity value to over 60,000 non-management employees across more than 30 companies since 2011.
Transaction Approvals and Timing
The Board of Directors of Chase Corporation has unanimously approved the transaction and recommends that shareholders vote in favor of it. The acquisition is anticipated to conclude in the fourth quarter of 2023, pending approval from the Company’s shareholders and certain regulatory approvals, as well as the fulfillment of customary closing conditions. Notably, the all-cash transaction is not subject to financing conditions.
Key Shareholder Support
Key shareholders, including Peter Chase, Adam Chase, Mary Chase, and the Edward L. Chase Trust, who collectively hold approximately 26% of the outstanding shares of Chase Corporation common stock, have already entered into a support agreement. As per the agreement, they have committed to voting their shares in favor of the transaction.
Private Ownership
Upon successful completion of the acquisition, Chase Corporation will transition into a privately held company, wholly owned by an affiliate of KKR’s investment funds. Consequently, the company’s common stock will no longer be listed on any public market.