Deal Target Description
Polypore International (NYSE:PPO) develops, manufactures and markets microporous membranes used in separation and filtration processes.
Deal Terms
On February 23, 2015, PPO announces definitive deal under which Asahi Kasei (TSE1:3407) will purchase the Company for $60.50 per share in cash. Immediately prior to Asahi Kasei’s acquisition of PPO, 3M (NYSE:MMM) will acquire PPO’s Separations Media segment for $1 billion and Asahi Kasei will receive the cash proceeds from the asset sale. The definitive agreements require that the sale of the Company and the integrated sale of the Separations Media segment close after closing conditions for both transactions have been satisfied and that the closings of the transactions are conditioned upon one another.
The transactions have been approved by the Boards of Directors of Asahi Kasei, 3M, and Polypore, and are subject to certain customary regulatory and Polypore shareholder approvals.
Deal Financing
The deal is not conditioned upon financing. Morgan Stanley (NYSE:MS) is working with the buyer and Bank of America (NYSE:BAC) is working with the target.
Deal Conditions
The transactions have been approved by the Boards of Directors of Asahi Kasei, 3M, and Polypore, and are subject to certain customary regulatory and Polypore shareholder approvals.
Deal Price
The deal price is a modest 14% premium above the company’s previous market price. The $1.90 spread to the deal price equals about an 18% annualized net return to an estimated closing date of mid-year 2015.
Conclusion
With an attractive yield and relatively modest downside if the deal breaks, PPO is a moderately attractive long idea.
