sctoc.htm
 
 

 
UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
SCHEDULE TO
(Rule 14d-100)
 
TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1)
 OF THE SECURITIES EXCHANGE ACT OF 1934
 (Amendment No.       )
 
Airgas, Inc.
(Name of Subject Company (Issuer))
 
Air Products and Chemicals, Inc.
(Name of Filing Persons (Offerors))
 
Common Stock, par value $0.01 per share
 (Title of Class of Securities)
 
009363102
 (CUSIP Number of Class of Securities)
 
John D. Stanley, Esq.
Senior Vice President and General Counsel
Air Products and Chemicals, Inc.
7201 Hamilton Boulevard
Allentown, PA 18195-1501
(610) 481-4911
 (Name, Address and Telephone Numbers of Person Authorized to Receive
 Notices and Communications on Behalf of Filing Persons)
 
Copies to:
James C. Woolery, Esq.
Cravath, Swaine & Moore LLP
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019-7475
(212) 474-1000
 
CALCULATION OF FILING FEE

Transaction Valuation
 
Amount of Filing Fee
Not applicable
 
Not applicable
 
Check the box if any part of the fee is offset as provided by Rule 0-11 (a) (2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing
by registration statement number, or the Form or Schedule and the date of its filing.
Amount Previously Paid:    None
 
Filing Party:                    Not applicable
Form or Registration No.:    Not applicable                             
 
Date Filed:                      Not applicable
þ      Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.
 
 
 
 
 

 
 
Check the appropriate boxes below to designate any transactions to which the statement relates:

 
þ
 
third-party tender offer subject to Rule 14d-1.
 
o
 
issuer tender offer subject to Rule 13e-4.
 
o
 
going-private transaction subject to Rule 13e-3.
 
o
 
amendment to Schedule 13D under Rule 13d-2.
 
Check the following box if the filing is a final amendment reporting the results of the tender offer:   o
 
If applicable, check the appropriate box(es) below to designate the appropriate rule provision(s) relied upon:
 
o
 
Rule 13e-4(i) (Cross-Border Issuer Tender Offer)
 
o
 
Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)
 
 
 
 
 
 
 
 
 

 
 
 
Offer to Acquire Airgas
February 5, 2010
 
 

 
Offer to Acquire Airgas
2
ADDITIONAL INFORMATION
 This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. No
 tender offer for the shares of [Airgas], Inc. (“[Airgas]”) has commenced at this time. In connection with the
 proposed transaction, [Air Products], Inc. (“[Air Products]”) may file tender offer documents with the U.S.
 Securities and Exchange Commission (“SEC”). Any definitive tender offer documents will be mailed to
 stockholders of [Airgas]. 
INVESTORS AND SECURITY HOLDERS OF [Airgas], INC. ARE URGED TO READ THESE
 AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE
 BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
 Investors
 and security holders will be able to obtain free copies of these documents (if and when available) and
 other documents filed with the SEC by [Air Products] through the web site maintained by the SEC at
 
http://www.sec.gov.
 In connection with the proposed transaction, [Air Products] may file a proxy statement with the SEC. Any
 definitive proxy statement will be mailed to stockholders of [Airgas]. 
INVESTORS AND SECURITY HOLDERS OF
 [Airgas] ARE URGED TO READ THESE AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR
 ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
 THE PROPOSED TRANSACTION.
 Investors and security holders will be able to obtain free copies of these
 documents (if and when available) and other documents filed with the SEC by [Air Products] through the
 web site maintained by the SEC at
http://www.sec.gov.
CERTAIN INFORMATION REGARDING PARTICIPANTS
 [Air Products] and certain of its respective directors and executive officers may be deemed to be
 participants in the proposed transaction under the rules of the SEC. Security holders may obtain
 information regarding the names, affiliations and interests of [Air Products]’s directors and executive
 officers in [Air Products]’s Annual Report on Form 10-K for the year ended September 30, 2009, which was
 filed with the SEC on November 25, 2009, and its proxy statement for the 2010 Annual Meeting, which was
 filed with the SEC on December 10, 2009. These documents can be obtained free of charge from the
 sources indicated above. Additional information regarding the interests of these participants in the proxy
 solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will also
 be included in any proxy statement and other relevant materials to be filed with the SEC when they
 become available.
 
 

 
Offer to Acquire Airgas
Forward-Looking Statements
 All statements included or incorporated by reference in this communication other
 than statements or characterizations of historical fact, are forward-looking
 statements. These forward-looking statements are based on our current
 expectations, estimates and projections about our business and industry,
 management’s beliefs, and certain assumptions made by us, all of which are
 subject to change. Forward-looking statements can often be identified by words
 such as “anticipates”, “expects”, “intends”, “plans”, “predicts”, “believes”, “seeks”,
 “estimates”, “may”, “will”, “should”, “would”, “could”, “potential”, “continue”,
 “ongoing”, similar expressions, and variations or negatives of these words.
 These forward-looking statements are not guarantees of future results and are
 subject to risks, uncertainties and assumptions that could cause our actual results to
 differ materially and adversely from those expressed in any forward-looking
 statement. Important risk factors that could contribute to such differences or
 otherwise affect our business, results of operations and financial condition include
 the possibility that [Air Products] will not pursue a transaction with [Airgas] and the
 risk factors discussed in our Annual Report on Form 10-K, subsequent Quarterly
 Reports on Form 10-Q, recent Current Reports on Form 8-K, and other SEC filings.
 The forward-looking statements in this release speak only as of the date of this filing.
 We undertake no obligation to revise or update publicly any forward-looking
 statement, except as required by law.
3
 
 

 
John Mc Glade
Air Products Chairman, President and CEO
4
 
 

 
Offer to Acquire Airgas
Transaction highlights
5
Consideration
All-cash offer for all Airgas shares at $60.00 per share
Premium
Premium of 38% to Airgas’ closing price on 2/04/10
of $43.53
Accretion
Expected to be substantially accretive to Air Products
cash EPS beginning in 2011
Synergies
Substantial cost synergies yielding $250 million run rate
by the end of year 2
Financing
Air Products has secured committed financing.
Air Products is committed to remaining investment
grade and to returning to an A rating
Regulatory
Approval
Air Products has thoroughly considered potential
regulatory issues and is prepared to make appropriate
divestitures
 
 

 
Offer to Acquire Airgas
Compelling strategic and industrial logic
 Creates one of the world’s leading integrated industrial gas companies
  Largest industrial gas company in North America and one of the largest in the
 world
  Diversified across geographies and distribution channels with competitive
 positions in all three supply modes: Packaged Gases, Liquid Bulk, Tonnage
 Combination of highly complementary skills and strengths enables us to better
 serve the needs of customers
  Air Products’ leadership in tonnage, strong European and joint venture
 packaged gas positions
  Airgas’ leadership in U.S. packaged gases
  Air Products’ Engineering and Technology Skills
 Timing is excellent
  Provides Air Products a highly efficient re-entry into U.S. packaged gas market
  Air Products’ global infrastructure enables more rapid Airgas international
 expansion
  Leverages Air Products’ supply chain and SAP capabilities
 Significant synergies available
  Substantial cost savings
  Growth opportunities as economy recovers
6
 
 

 
Offer to Acquire Airgas
Airgas at a glance
7
Broad Coverage - 1,500 Sales Representatives
Source: Based on Airgas public disclosures
Revenue (FY2009)
$4.3B
Total CAGR (over last 5 years)
19%
Same Store Sales Growth
7%
 
 

 
Offer to Acquire Airgas
Combination creates significant value
8
A Company of Greater Capability
 Global presence & infrastructure
 Significant European packaged
 gas business
 Gas application skills
 Tonnage asset base
 Operations & Engineering skills
 SAP experience & infrastructure
Air Products Strengths
 Broad U.S. sales coverage
 Packaged gas skills
 Distribution expertise
 Acquisition sourcing & integration
 capabilities
Airgas Strengths
Increased Shareholder Value
 Lower costs
 Increased growth
 Greater cash generation
 
 

 
Offer to Acquire Airgas
A world leading integrated industrial gas company
9
Source: Based on Airgas public disclosures
 
Packaged
Gas
90%
Liquid/Bulk
10%
Pro-forma
Air Products
Pro-forma
Air Products
Airgas
Revenues
Airgas
Revenues
Air Products
Revenues
Air Products
Revenues
Liquid/Bulk
17%
Onsite
25%
Equipment
& Services
10%
Onsite/Pipeline
37%
Liquid/Bulk
24%
Equipment &
Services
14%
Packaged
Gas
11%
 One of the largest industrial gas companies in the world
 Largest industrial gas company in North America
 World-class competencies across all modes of supply
+
=
Specialty
Materials
14%
Spec
Mat’ls
9%
Packaged
Gas
39%
 
 

 
Offer to Acquire Airgas
Benefits of an integrated industrial gas company
10
Liquid/Bulk
Tonnage/Onsites
 Co-product economics
 Liquid back-up
 Sales coverage
 Product supply/outlet
 Broader scope of
 industries served
 Brand recognition
Cylinders
Bulk
Packaged Gases
Mode of Supply
Mode of Supply
Integration Benefit
Integration Benefit
Tonnage
 
 

 
Offer to Acquire Airgas
Enhances Air Products’
Multiple Growth Opportunities
11
 Hydrogen for refining
 Oxygen for gasification
 LNG heat exchangers
Energy
Environment
Emerging Markets
 Oxyfuel
 Carbon capture
 Multiple Gas Applications
 Electronics across Asia
 Equity Affiliate positions
 Expanding Merchant
 positions in Asia
 
 

 
Paul Huck
Air Products Senior Vice President and Chief Financial Officer
12
 
 

 
Offer to Acquire Airgas
 $60.00 per share in cash
 38% premium comparable to similar transactions
  10.5x multiple of EBITDA
 Immediate liquidity in an uncertain economic environment
 and removes any uncertainly with respect to future stock
 performance
13
Certain Value for Airgas Shareholders
Immediate
Shareholder Premium
 
 

 
Offer to Acquire Airgas
Financial details
Transaction value ($billions)
Committed financing secured
Maintain investment grade credit rating
Maintain dividend policy
14
Equity Purchase
$5.1
Assumption of debt
$1.9
Total Consideration
$7.0
 
 

 
Offer to Acquire Airgas
Key goals 
15
 Transaction accretive in the
 first year
 Solid shareholder value
 Excludes transaction and
 integration costs
 Synergies enable greater
 cash flow generation
 Combination provides for
 significant margin benefits
Accretion/Dilution
EBITDA Margin
 
 

 
Offer to Acquire Airgas
16
Synergies
Infrastructure
Infrastructure
Fully integrated ERP platform
  Fully integrated ERP platform
Shared Services
  Shared Services
Supply Chain Efficiencies
Supply Chain Efficiencies
Utilize Air Products’ continuous improvement tools to
 optimize supply chain
  Utilize Air Products’ continuous improvement tools to
 optimize supply chain
Procurement Benefits
  Procurement Benefits
Growth through new offerings, density and international expansion
Cost savings run rate of $250 million by end of year two
Overheads
Overheads
Overlapping operations
  Overlapping operations
Streamlined management structure
  Streamlined management structure
 
 

 
Offer to Acquire Airgas
17
Path Forward . . .
Air Products
committed to
completing the
transaction
Begin regulatory process
 Prepared to make
 appropriate divestitures
Proceed with tender offer if needed
 Financing committed
Litigation
Proxy Contest
 Commenced litigation in
 Delaware
 Proceed with proxy contest
 if needed
 
 

 
John McGlade
Air Products Chairman, President and CEO
18
 
 

 
Offer to Acquire Airgas
RESULTS
 Accretive to
 cash, GAAP EPS
Compelling transaction that delivers on
our promises…
STABILITY
 Diversified across
 geographies and
 distribution
 channels with
 competitive
 positions in all three
 supply modes
 Maintain strong
 balance
 sheet/investment
 grade rating
GROWTH
 Highly efficient
 re-entry into U.S.
 packaged gas
 market
 Enhanced growth
 opportunities,
 domestic and
 international
Well-positioned for long-term value creation
19
 
 

 
Thank you
tell me more
20
www.airproducts.com/airgasoffer
 
 

 
 
 
* * *
 
ADDITIONAL INFORMATION
 
This communication does not constitute an offer to buy or solicitation of an offer to sell any securities.  No tender offer for the shares of Airgas, Inc. (“Airgas”) has commenced at this time.  In connection with the proposed transaction, Air Products and Chemicals, Inc. (“Air Products”) may file tender offer documents with the U.S. Securities and Exchange Commission (“SEC”).  Any definitive tender offer documents will be mailed to stockholders of Airgas.  INVESTORS AND SECURITY HOLDERS OF AIRGAS ARE URGED TO READ THESE AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.  Investors and security holders will be able to obtain free copies of these documents (if and when available) and other documents filed with the SEC by Air Products through the web site maintained by the SEC at http://www.sec.gov.
 
In connection with the proposed transaction, Air Products may file a proxy statement with the SEC.  Any definitive proxy statement will be mailed to stockholders of Airgas.  INVESTORS AND SECURITY HOLDERS OF AIRGAS ARE URGED TO READ THESE AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.  Investors and security holders will be able to obtain free copies of these documents (if and when available) and other documents filed with the SEC by Air Products through the web site maintained by the SEC at http://www.sec.gov.
 
 
CERTAIN INFORMATION REGARDING PARTICIPANTS
 
Air Products and certain of its respective directors and executive officers may be deemed to be participants in the proposed transaction under the rules of the SEC. Security holders may obtain information regarding the names, affiliations and interests of Air Products’ directors and executive officers in Air Products’ Annual Report on Form 10-K for the year ended September 30, 2009, which was filed with the SEC on November 25, 2009, and its proxy statement for the 2010 Annual Meeting, which was filed with the SEC on December 10, 2009.  These documents can be obtained free of charge from the sources indicated above.  Additional information regarding the interests of these participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will also be included in any proxy statement and other relevant materials to be filed with the SEC when they become available.
 
 
FORWARD-LOOKING STATEMENTS
 
All statements included or incorporated by reference in this communication other than statements or characterizations of historical fact, are forward-looking statements.  These forward-looking statements are based on our current expectations, estimates and projections about our business and industry, management’s beliefs, and certain assumptions made by us, all of which are subject to change.  Forward-looking statements can often be identified by words such as “anticipates”, “expects”, “intends”, “plans”, “predicts”, “believes”, “seeks”, “estimates”, “may”, “will”, “should”, “would”, “could”, “potential”, “continue”, “ongoing”, similar expressions, and variations or negatives of these words.
 
These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.  Important risk factors that could contribute to such differences or otherwise affect our business, results of operations and financial condition include the possibility that Air Products will not pursue a transaction with Airgas and the risk factors discussed in our Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other SEC filings.  The forward-looking statements in this release speak only as of the date of this filing.  We undertake no obligation to revise or update publicly any forward-looking statement, except as required by law.