Ashland Completes Acquisition of Hercules

Posted: 2008-11-13 17:00:00

COVINGTON, Ky. and WILMINGTON, Del. – Ashland Inc. (NYSE: ASH) today completed its acquisition of Hercules Incorporated, creating a leading specialty chemicals company serving many of the world’s most essential needs and industries. Each share of Hercules common stock outstanding was exchanged for $18.60 in cash and 0.093 of a share of Ashland common stock. A letter of transmittal and instructions for exchanging Hercules shares for shares of Ashland stock and cash consideration will be mailed shortly to the Hercules shareholders of record at the close of business on Nov. 13, 2008.

“This is a landmark day for our combined employees, customers, shareholders and all those with whom we interact,” said James J. O’Brien, Ashland chairman and chief executive officer. “Together, we now begin working to build an exciting new future, confident that our people, technologies, products and services will drive our growth for years to come.”

Transformation overview

Ashland now comprises a core of three specialty chemical businesses that will drive the company both strategically and financially, generating approximately 75 percent of total EBITDA on a pro forma basis. These businesses – paper and water technologies, specialty resins, and specialty additives and functional ingredients – hold strong market positions and promising global growth potential. Ashland’s logistics efficiencies and well-developed marketing capabilities in consumer markets complement its core businesses and enhance its ability to deliver valued products and services.

“This transaction better positions Ashland to deliver more stable and predictable earnings, generate stronger cash flows and gain access to higher growth markets worldwide, most especially those in emerging economies,” said O’Brien.

Ashland anticipates approximately $120 million in annual run-rate savings by eliminating redundancies and capturing operational efficiencies by the end of fiscal year 2010.

“Our integration team, guided by Ted Harris and supported by key representatives of both companies, has already provided a solid foundation for our continued development as one company,” said O’Brien. “Their ongoing management of this activity is focused on successfully integrating the best processes from both companies, achieving our synergy and cost-saving targets and pursuing the new opportunities for growth.”

The expanded international presence of Ashland as a result of the transaction will increase revenue derived outside North America to roughly 35 percent of the total $10.7 billion of pro forma revenue for the 12 months ended Sept. 30, 2008.

New commercial structure

Ashland’s new structure, incorporating the former Hercules businesses effective today, is composed of five commercial units:

* Ashland Hercules Water Technologies, a $2 billion specialty paper and water chemicals business formed from the related operations of Hercules and Ashland;
* Ashland Performance Materials, the specialty resins business serving construction, infrastructure, energy and transportation segments;
* Ashland Aqualon Functional Ingredients, a fast-growing business of specialty additives and functional ingredients derived from renewable resources, and serving personal care, pharmaceuticals, food, construction, transportation and other industries;
* Ashland Consumer Markets, the Valvoline® lubricants, automotive appearance and service business; and
* Ashland Distribution, North America’s leading distributor of chemicals, plastics, composite materials and environmental services.

Transaction Details

The cash portion of the transaction was funded through a combination of cash on hand and debt financing from Bank of America and Scotia Capital. Citigroup Global Markets Inc. acted as financial advisor, and Squire, Sanders & Dempsey LLP acted as legal counsel, to Ashland. Credit Suisse Securities (USA) LLC acted as financial advisor, and Wachtell, Lipton, Rosen & Katz acted as legal counsel, to Hercules.

About Ashland

The corporate headquarters for Ashland will remain in Covington, Ky. The Hercules administrative facility in Wilmington, Del., now becomes the operations center for the Ashland Aqualon Functional Ingredients and the Ashland Hercules Water Technologies commercial units. To capitalize on the opportunities of emerging economies, the company recently repositioned the operations center for its Ashland Performance Materials commercial unit to Barendrecht, the Netherlands, where it can serve growing demands in Eastern Europe and as a central point for operations in the Americas and Asia Pacific. Ashland Consumer Markets (Valvoline) will maintain its operations base in Lexington, Ky., and Ashland Distribution will continue to be based in Dublin, Ohio. A series of technical and research and development centers will also be maintained around the world.

Ashland Inc. (NYSE: ASH) provides specialty chemical products, services and solutions for many of the world’s most essential needs and industries. Serving customers in more than 100 countries, it operates through five commercial units: Ashland Hercules Water Technologies, Ashland Performance Materials, Ashland Aqualon Functional Ingredients, Ashland Consumer Markets (Valvoline) and Ashland Distribution. To learn more about Ashland, visit www.ashland.com.

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Forward-Looking Statements

This news release contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The statements include those made with respect to Ashland’s operating performance and Ashland’s acquisition of Hercules Incorporated. These expectations are based upon a number of assumptions, including those mentioned within this news release. Performance estimates are also based upon internal forecasts and analyses of current and future market conditions and trends, management plans and strategies, weather, operating efficiencies and economic conditions, such as prices, supply and demand, cost of raw materials, and legal proceedings and claims (including environmental and asbestos matters). These risks and uncertainties may cause actual operating results to differ materially from those stated, projected or implied. Such risks and uncertainties with respect to Ashland’s acquisition of Hercules include the possibility that the benefits anticipated from the Hercules transaction will not be fully realized; the substantial indebtedness Ashland has incurred to finance the acquisition may impair Ashland’s financial condition; the restrictive covenants under the debt instruments may hinder the successful operation of Ashland’s business; future cash flow may be insufficient to repay the debt; and other risks that are described in filings made by Ashland with the Securities and Exchange Commission (SEC). Although Ashland believes its expectations are based on reasonable assumptions, it cannot assure the expectations reflected herein will be achieved.

This forward-looking information may prove to be inaccurate and actual results may differ significantly from those anticipated if one or more of the underlying assumptions or expectations proves to be inaccurate or is unrealized or if other unexpected conditions or events occur. Other factors, uncertainties and risks affecting Ashland are contained in Ashland's periodic filings made with the SEC, including its Form 10-K for the fiscal year ended Sept. 30, 2007, and Forms 10-Q for the quarters ended Dec. 31, 2007, and March 31 and June 30, 2008, which are available on Ashland’s Investor Relations website at www.ashland.com/investors or the SEC’s website at www.sec.gov. Ashland undertakes no obligation to subsequently update or revise the forward-looking statements made in this news release to reflect events or circumstances after the date of this news release.

Hercules Shareholders Vote in Favor of Merger with Ashland Inc.

Posted: 2008-11-05 12:00:00

Hercules Incorporated (NYSE: HPC) announced that at its special shareholders meeting held earlier today Hercules’ shareholders adopted the Agreement and Plan of Merger, dated July 10, 2008, pursuant to which Ashland Inc. has agreed to acquire Hercules. The Merger Agreement was adopted by holders of more than two-thirds of Hercules’ outstanding common stock, as required by Hercules’ Certificate of Incorporation and the Merger Agreement. The terms of the Merger Agreement call for Hercules shareholders to receive, for each share of Hercules common stock, $18.60 in cash and 0.0930 of a share of Ashland common stock.

Hercules and Ashland expect the transaction to close on November 13, 2008.

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Hercules manufactures and markets chemical specialties globally for making a variety of products for home, office and industrial markets. For more information, visit the Hercules website at www.herc.com.

FORWARD-LOOKING STATEMENTS

This news release includes forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, reflecting management's current analysis and expectations, based on what management believes to be reasonable assumptions. The words or phrases "will likely result," "should," "are expected to," "will continue," "is anticipated," "expect," "estimate," "project" or similar expressions are among those which identify forward-looking statements. Forward-looking statements may involve known and unknown risks, uncertainties and other factors, which may cause the actual results to differ materially from those projected, stated or implied, depending on such factors as: the possibility that the transaction with Ashland may not be completed; the possibility that financing may not be available to Ashland on the terms committed; and other risks that are described in filings made by Ashland and the Company with the Securities and Exchange Commission (SEC) in connection with the proposed transaction. Accordingly, there can be no assurance that the Company will meet future results, performance or achievement, expressed or implied by such forward-looking statements. As appropriate, additional factors are contained in reports filed by the Company with the Securities and Exchange Commission. This paragraph is included to provide safe harbor for forward-looking statements, which are not generally required to be publicly revised as circumstances change, and which the Company does not intend to update.

Photo courtesy of Delaware Business

Going Green: Good for the environment and the balance sheet

By Larry Nagengast (Delaware Business)
Posted: 2008-09-19 12:27:00

Long before energy prices started to skyrocket, many Delaware businesses had begun to realize that going green makes sense, and now they're riding the wave of rising profitability that comes with being ahead of the curve.

Companies in fields as diverse as science, real estate development and printing are paying increased attention to the concept of sustainability, proving on a daily basis that environmental stewardship benefits not only the earth but the corporate bottom line. ...

At Hercules Inc., "we use renewable raw materials in developing most of our products. Cellulose, cottonseed, guar, they're all renewable resources," says John S. Riley, director of public affairs. ...

At Hercules, four business units with green characteristics that had been "plodding along" - water management, global pulp, building products and lubricants - were combined into a single portfolio in April, 2006, with the hope that coordinated attention would promote growth, according to Charles Robinson, director of Ventures. Now they're all growing at double-digit pace, he says. ...

"Most new technologies don't cost more. In some cases, they're actually more cost-effective to produce," Robinson says. As one example, he mentions glues for wood composites made from soy flour and polymers that replace additives that used an environmentally-harmful urea formaldehyde-resin.

Another example of Hercules' commitment to green and sustainability is at its Research Center west of Wilmington. Rows of aging underutilized buildings were demolished and a new $3.8 million powerhouse, featuring a pair of 600-horsepower natural gas burners, was built near the center of the site, replacing an old power plant in the Red Clay Creek floodplain that had been swamped by about seven feet of water during Hurricane Floyd in 1999 and again four years later. The anticipated results: reductions of 30 percent in carbon dioxide emissions, 94 percent in sulfur oxides, 64 percent in nitrogen oxides, and 63 percent in particulates.

"We are a much better site than we were three or four years ago, and we'll be even better in three or four years," says Steven R. Prescott, Research Center director. ...

Sustanibility is an ongoing process, with environmental concerns and rising energy costs driving the quest for new solutions. "We've got a lot of products that need to be re-engineered. By no stretch of the imagination do we have all this figured out," Hercules' Robinson says.

And, as it becomes evident that going green is good for both the environment and the balance sheets, he says, "I don't see any turning back."

[Excerpts reprinted from Delaware Business, Sept/Oct 2008]

PTV Community Service Project

By Bruce Hohensee
Posted: 2008-09-04 16:02:00

On Wednesday, August 6th, over 60 people from Hercules PTV participated in a community service day in the Wilmington area. PTV Management, our 2008 Summer Interns and the 2008 Eagles Nest Attendees split up into 4 teams and spent the day working at three Habitat for Humanity projects and the Sunday Morning Breakfast Mission.

At the Habitat Project in West Chester, PA, 9 members of Team Wallace worked on wiring 2 houses and built the structure for pouring the foundation/walls for a third home.

At the Webster Village site in Wilmington, DE, 15 members of Team Hohensee worked on a variety of projects including; hanging doors, installing flooring and sheetrock and painting. (This project is located across the Brandywine river from the Hercules Plaza. You can actually see the Plaza in the background of the group picture that was taken with the "regular" volunteers that show up each week to work on the houses.)

The 10 members of Team Clark in Coastville, PA, spent most of the day painting the inside and outside of the houses as they were nearing completion.

"It was a great experience to work with other Hercules employees at the Habitat for Humanity site. The opportunity for team-building was unlike anything that could have happened in a normal work environment, with the focus of the day to help those who are in need of basic necessities. It was a purely positive experience!" Linda L. Chaney, Business Manager - Microbiological Control, Americas

Approximately 29 members of Team Savage spent the day working at the Sunday Morning Breakfast Mission. Some worked on preparing meals for the homeless and underprivileged in the community. A group worked on preparing school supplies and backpacks for grade school children. The mission was also preparing for a big clothes give-away, so a group worked to sort and package jackets and other clothes items that had been donate by GAP and other merchants.

" It was nice to be able to do some good for the community and to work a bit with the interns and get to know them as well." Dana Bowlby, Technical Sales Representative

When the four groups reconvened for dinner, there was a lot of excitement about the work that we were able to contribute and lots of stories were told. In all, it was a good day and we are looking forward to doing it again next year.

2008 Eagle's Nest Meeting

By Lindsay Clark
Posted: 2008-08-22 10:49:00

Paper Technologies and Ventures second annual Eagle's Nest Meeting was held in Wilmington August 5-7. The meeting, which had 16 attendees, is designed for new sales and manufacturing professionals in Hercules with minimal industry experience. The meeting focuses on career development, training opportunities, safety, leadership, and interaction with peers and the PTV management team. It is designed to prepare these young professionals for a successful career with Hercules while building excitement for Hercules' Eagle/Pinnacle Award program.

"The meeting allowed us to get an insight from upper management on various career path options. It also gave us a taste of what it takes to win an Eagle and conveyed the value of the Eagle award within Hercules," said Jason Harman, Technical Sales Representative.

The meeting included a team building event at a local go-karting facility, involvement in a community service project, and a dinner with the 2008 summer interns. Said Nicole Hacet, Technical Sales Representative, "I really enjoyed meeting my peers and learning about their experiences so far."

The award for creativity goes to Anne Schumann, Vice President, Human Resources and IT, who hosted "Hercules Feud," a take-off of the popular show "Family Feud," as a fun way to discuss leadership at Hercules. The "Jack Miller Family" for those reporting to Jack Lowdermilk and Mike Miller and the "Mark Wallace Family" for those reporting to Mark Wescott and Bill Wallace squared off, with the Mark Wallace Family coming away victorious.

The entire event, with the support of the PTV management team, accomplished its goal of educating and motivating the employees who will shape the future of Hercules.

Said Hacet, "I thought I knew how many opportunities were available to us within Hercules, but I was amazed to find that there are so many more options than I imagined. Overall, it was an amazing experience which really helped me focus on my career goals."

2008 PTV Intern Symposium

By Bruce Hohensee
Posted: 2008-08-21 12:55:00

Our 2008 PTV Intern Symposium took place in Wilmington, August 3-6. This year we invited thirty-three students to attend this meeting. Twenty-six spent the summer in our sales organization in the U.S. and Canada, four worked in our manufacturing facilities and three spent the summer at the Research Center. Each student presented on the projects they spent their time on this summer and our management team shared information about Hercules Incorporated and the potential career opportunities.

Each year this program seems to get stronger. This was a very solid group of students as evidenced by the results of the meeting. We are in the process of making thirteen full-time sales offers, three manufacturing offers and will be inviting several to return for another internship prior to their graduation. Several interns expressed interest in working in other parts of the organization and we are following-up on connecting them with the appropriate parties including Research, Aqualon Manufacturing and Legal.

I must thank the PTV Management Team not only for supporting this program, but for taking the time to spend the week with these potential future employees. As Hercules Incorporated faces the challenges ahead, these young people are going to ensure continued success.

PTV Hercobond Reactor Contest

By Katy Abernathy
Posted: 2008-06-19 12:30:00

The long awaited name for the R-50 reactor was at last unveiled on May 1, 2008 at the Savannah, Georgia plant. The winning sales team of Gil Rajewski, Account Representative and Athos Maranhao, Applications Manager, announced the name: ARAUCARIA 1. Araucaria is a popular pine tree species found in the Parana State in Brazil and has been a very important element of the economy.

In late 2006, the Hercobond launch team announced the contest to name the new reactor that began production in mid-2007. In order to utilize the full reactor capacity and increase sales force excitement, the launch team offered the winning sales team the opportunity to name the new reactor AND win an all expense paid weekend in Savannah.

Following the tremendous growth of this new product last year was exciting for everyone and as the contest drew to a close, the hands down winners were Gil Rajewski and Athos Maranhao. Congratulation to our winning team from Brazil!

Photo courtesy of The Black Collegian

Top 100 Employers for 2008 Announced

By The Black Collegian
Posted: 2008-04-16 20:37:00

The job outlook for the Class of '08 appears promising. Despite the cautious and sometimes gloomy economic news released throughout the past several months, particularly in December and early January 2008, the college labor market outlook appears bright, according to Dr. Philip Gardner, director of the Collegiate Employment Research Institute at Michigan State University. This year's graduates have baby boomers to thank for the growth in opportunities in 2008. Many large employers are faced with serious concerns as baby boomers prepare to retire. Employers are aggressively searching for new talent.

THE BLACK COLLEGIAN Magazine conducts an annual survey to determine the most active recruiters of college seniors for entry-level jobs. Employers were asked the number of projected hires from on-campus recruiting, the number of campuses they recruit on, and the top majors they are recruiting.

This survey results in the list of the Top 100 Employers, which is published in the magazine's Second Semester Super Issue (Feb).

Hercules Incorporated ranks 91st on the list of all college recruiting companies, hiring 30 recent college graduates from 20 campuses. See the whole list: [url]http://www.black-collegian.com/issues/2ndsem08/top100_ranking.htm[/url]

Photo courtesy of Google Earth / TerraMetrics / Tele Atlas

International Internship: Grenoble, France

By Lindsay Clark
Posted: 2008-01-23 09:00:00

Sean Snyder, a junior Chemical Engineering student at The University of Maine, will be participating in Hercules first ever international internship this coming summer. Sean will be located in Grenoble, France, a city in southeast France situated at the foot of the Alps. Grenoble is located in the center of a sizable paper producing region and is near Hercules manufacturing facility in Voreppe, France. The international experience will focus on technical sales as well as provide an opportunity to spend some time on the manufacturing side.

This will be Sean's second internship with Hercules. After his sophomore year, he joined the Hercules team calling on Lincoln Paper and Tissue in Lincoln, ME and Sappi in Hinckley, ME, where he was first introduced to the technical sales side of the paper industry. Sean enjoyed his first internship so much he accepted an offer to return for a second internship. He is very excited about this opportunity to work abroad and looks forward to learning more about Hercules and how the industry operates "across the pond".

Photo courtesy of Facebook

Ralph Pinnock, Jr.

By Bruce Hohensee
Posted: 2008-01-23 08:00:00

Sadly, one of our 2008 Intern Candidates was killed in a traffic accident.

Ralph Pinnock, Jr. was a senior at Clemson University. Ralph was a kind and enthusiastic young man, the kind of person you wanted to be around. He was an outstanding soccer player, who turned down several athletic scholarships to study Chemical Engineering at Clemson. He spent the summer of 2007 as an intern with Smurfit-Stone in Fernandina Beach, FL and enjoyed his experience very much. His family told me that he was very excited about his anticipated internship with Hercules this summer. We have all suffered a loss.

We are working with Clemson University to establish a scholarship to honor Ralph's memory and encourage other young people to consider Chemical Engineering.