3February 2020www.capstoneheadwaters.com

Merger and acquisition (M&A) activity has been robust in 2019, eclipsing 2018total volume by 13.3%. The uptick in announced or closed deal activity hasbeen driven by an increasing number of divestitures of non-core businessfunctions and unabated private equity (PE) appetite in the space. Notably,specialty chemicals manufacturers have fostered higher valuations compared totheir commodity chemical peers, with specialty chemicals operators attractingan average EBITDA multiple of 10.9x compared to 8.4x for commodity deals.Strategic operators and PE firms have targeted the Specialty Chemicals segmentto capture growth in favorable end markets such as Healthcare and ConsumerProducts, which have supported demand and subsequent production for high-performance, specialty formulations that serve niche applications.

Strategic buyers continued to compose the majority of deal activity, accountingfor nearly 68% while PE firms composed ~32% of transactions. Publiccompanies were the largest buyer type (34.6% of deals), targeting companiesthat promote supply chain efficiencies, expanded geographic reach, andenhanced research and development (R&D) and production capabilities.

Capstone Headwaters anticipates deal activity in the space to continue in 2020,fueled by demand for specialty chemicals, optimized supply chains, anddivestitures of leading companies rebalancing their portfolios.

TABLE OF CONTENTS

M&A Overview Key Trends & Drivers Notable Transactions Select Transactions Public Company Data Firm Track Record

CHEMICALS2019 YEAR IN REVIEW

MERGER & ACQUISTION OVERVIEW

Source: Capital IQ, PitchBook, FactSet, and Capstone Headwaters Research

Capstone Headwaters

CONTACTS

David BenchManaging Director949-734-7888dbench@capstoneheadwaters.com

Doug UsiferManaging Director 802-735-2330dusifer@capstoneheadwaters.com

Tracy PatchDirector949-220-0540tpatch@capstoneheadwaters.com

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M&A Activity: Chemicals

KEY TRENDS & DRIVERS

Chemicals | 2019 Year in Review

Select Strategic Transactions By Acquirer (EV < $1 Billion)

2

Private Equity Activity

Date Target Acquirer Target Description EV EV/REV

EV/EBITDA

12/21/19 Construction Chemicals (BASF)

Lone Star Funds

BASF’s construction chemicals is the world’s largest maker of additives for concrete and offers concrete repair fillers, grouts, and sealants. $3,500.0 1.3x -

11/26/19 Division of PSG The Jordan Company

The Polymer Additives Division offers homogenizing agents, process aids, dispersions, and release agents for rubber, plastic, and engineered wood industries. - - -

10/21/19 Innophos Holdings

One Rock Capital

One Rock Capital acquired Innophos in a take-private deal. Innophos produces specialty ingredients for Food, Health, Nutrition, and Industrial markets. $953.0 1.2x 7.8x

08/19/19 Division of PolyOne

SK Capital Partners

PolyOne Performance Products & Solutions business (renamed: GEON Performance Solutions) is a plastics producer for vinyl molding and extrusion processors. $775.0 1.1x 8.7x

08/07/19 Cambrex Permira Advisers

Cambrex offers contract development and small molecule products, providing drug substance, drug product, and analytical services across the entire drug lifecycle. $2,500.0 4.3x 16.8x

*All dates reflect announced dateSource: Capital IQ, PitchBook, FactSet, and Capstone Headwaters Research

Major Strategic Consolidation

Following the closing of the ~$63 billion acquisition ofMonsanto by Bayer AG (DB:BAYN) in 2018, blockbusterdeal activity in 2019 persisted. Major strategic playershave pursued M&A opportunities to strengthen andexpand their end markets and business divisions, anddrive revenue growth and margin expansion throughoperational and financial synergies. For example,Synthomer agreed to acquire OMNOVA Solutions(NYSE:OMN) in a take-private deal valued at $753 million(8.7x adjusted EBITDA) in May. The highly complementarystrategic combination provides U.K.-based Synthomerwith expanded scale and North American footprint, $29.6million in cost synergies, and enhanced R&D capabilities,according to the press release.3

A number of strategic deals in excess of $1 billion have been announced or completed in 2019. In February, MERCK(NYSE:MRK) announced the acquisition of Versum Materials ($6.5 billion, 14.4x EBITDA)4, a manufacturer of high-purityprocess chemicals, gases, and equipment for the Semiconductor and Display markets. The deal creates an industry leaderand bolsters MERCK’s Performance Materials division, increasing scale, product and service depth, global reach, and strengthin supply chain and R&D capabilities. In addition, Univar (NYSE:UNVR), a distributor of commodity and specialty chemicals,closed its acquisition of Nexeo Solutions, a global chemicals and plastics distributor, at an EV of ~$2 billion (9.4x EBITDA).5Following the deal, Univar divested Nexeo’s Plastic Distribution business to One Rock Capital for $640 million in February.

Private equity (PE) firms have emerged as a critical playerin the Chemicals M&A landscape. Heightened dealactivity has resulted in an increasingly competitive M&Aenvironment, amplified by robust levels of PE fundraisingwhich reached $301.3 billion in 2019, according toPitchBook.1 Strapped with cash and an accommodativeinterest rate environment, PE firms have aggressivelytargeted and paid premiums for highly attractivebusinesses. Notably, specialty chemicals manufacturerswith favorable end market tailwinds have captivated PEinterest, with deal multiples for specialty producers valued~30% higher than commodity chemical deals.

Permira Advisers’ August acquisition of CambrexCorporation (NYSE:CBM) for $2.5 billion (16.8x EBITDAand 37.3% premium to its 60-day volume weightedaverage closing share price)2 reflects the elevatedvaluations PE firms have rationalized for niche specialtychemical manufacturers. Cambrex is a market leadingcontract development and manufacturer of smallmolecule products, providing expertise in activepharmaceutical ingredients and dosage formdevelopment and manufacturing. The company servesbranded and generic pharmaceutical clients with best-in-class product quality and technical expertise.

Source: Capital IQ

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KEY TRENDS & DRIVERS (CONTINUED)

Chemicals | 2019 Year in Review

Leading Chemicals industry operators are increasinglytaking an active approach to portfolio management,optimizing capital allocation through acquisitions anddivestitures to promote profit margin expansion. In 2019,many major chemicals companies reexamined theirportfolios and have ultimately divested non-core businessfunctions, deleveraging balance sheets and generatingsuperior shareholder value.

As major chemicals manufacturers realigned portfolios torefocus strategic and financial goals, buyers demonstrateda willingness to purchase for sale business functions toincrease value by operating as stand alone entities orcombining the acquired functions with other industryplayers. In addition to the Dow and DuPont realignment

3

Strategic Realignment

DowDuPont Strategic Realignment 2019 Timeline

April: DowDuPont spins-off the first of three

entities, forming Dow Inc. (Materials Sciences). Dow

is projected to generate $2 to $3 billion in EBITDA in

the near-term upside.

April May

June: DowDuPont completes its spin-off of

Corteva Agriscience (Agriculture) and rebrands

the remaining company as DuPont (Specialty

Products divison).

September: DuPont divests its

Semiconductor Solutions business to SK Siltron at an EV of

$450 million.

May: Dow sells its Latex Binders Assets

in Germany to Trinseo (NYSE:TSE) for $44.7 million.

August: Dow divests its Acetone

Derivatives business to ALTIVIA Ketones &

Additives. Terms were undisclosed.

June: DuPont divests its Natural Colors business to D.D.

Williamson, a color ingredient producer

(undisclosed).

Source: Capital IQ (All deal dates reflect 2019 announcements)

December: DuPont divests its Nutrition

& Biosciences divison to IFF (NYSE:IFF), a

fragrances and flavors producer, at

an EV of $26.2B.

September: Corteva sells Bensulfuron-

Menthyl business in the APAC to Kumiai Chemical (TSE:4996) for undisclosed sum.

December: Corteva divests its

Quinoxyfen Product Line of Fungicides to

Nissan Chemical (TSE:4021)

December: Corteva divests four herbicide

brands (First Rate, Classic, Python, and Hornet) to American

Vanguard Corp. (NYSE:AVD)

Dec.June Sept. Aug.

In 2017, The Dow Chemical Company and E.I. du Pont de Nemours and Company completed a merger of equals with theintent to subsequently realign and spin-off into three independent pure-play public companies: Material Sciences, SpecialtyProducts, and Agriculture Sciences. In 2019, the company began to spin-off its three divisions, creating Dow Inc.(NYSE:DOW), Corteva Agriscience (NYSE:CTVA), and DuPont de Nemours Inc. (NYSE:DD). Following the completion of eachspin-off, the independent entities began to rebalance their own portfolios and assets to drive enhanced shareholder valuethrough a focused allocation of capital. The following timeline reflects divestitures by each of the three spun-off companiesin 2019, including the monumental acquisition of DuPont’s Nutrition & Biosciences division (highlighted on next page).

Company Spotlight: In 2019, BASF SE(XTRA:BAS) continued to pursue an

active portfolio management strategy and has divestedmajor business functions. The company began the year bygrouping its twelve divisions into six segments, redefiningits portfolio structure to identify and divest businesses thathave decreased in strategic fit or provided limiteddifferentiation.6 BASF determined its Pigments andConstruction Chemicals businesses no longer aligned withits portfolio and subsequently divested them in 2019. InAugust, BASF sold its Pigments business to DIC Corporation(TSE:4631), valuing the business at $1.3 billion (1.2xrevenue). In addition, BASF divested its ConstructionChemicals business to Lone Star Funds for a value of $3.5billion (1.3x revenue).

(highlighted below), Kraton (NYSE:KRA) sold its Cariflex business, a producer of trademarked polyisoprene products formedical applications, to Daelim Industrial (KOSE:A000210) for $530 million (10.5x EBITDA). “The acquisition of Cariflex willprovide Daelim with an excellent opportunity to strengthen its polymer presence globally. We believe that this transactiondelivers significant value to Kraton shareholders. Moreover, we intend that sales proceeds will allow us to significantlystrengthen our balance sheet and improve our leverage profile, positioning us for future growth in our core polymer andchemical businesses," commented Kevin M. Fogarty, Kraton’s President and CEO, in the press release.7

4

To Merge

International Flavors & Fragrances Inc. (NYSE:IFF) has entered into a definitive agreement to merge withDuPont de Numours’ (NYSE:DD) Nutrition & Biosciences (N&B) business. The deal values DuPont’sN&B business at an enterprise value of $26.2 billion and on a pro forma basis, the combined company,is valued at $45.4 billion.8 Terms of the deal provide DuPont shareholders with 55.4% of the shares ofthe new company, while IFF existing shareholders own the remainder. Upon closing, DuPont will receivea one-time $7.3 billion cash payment, subject to certain adjustments. The deal is structured as a ReverseMorris Trust Transaction, allowing a tax-free transfer of assets to DuPont and its shareholders for U.S.federal income tax purposes.

The merger of IFF and N&B creates a market leading ingredients manufacturer for global Food &Beverage, Home & Personal Care, and Health & Wellness industries. The transformative deal willstrengthen the complementary portfolios, expanding its added ingredients categories to include taste,texture, scent, nutrition, enzyme, cultures, soy proteins, and probiotic applications. In addition, theexpected operational synergies will enhance R&D capabilities and time to market, as well as stimulateinnovation and differentiated design to capture “better-for-you” consumer preferences.

In 2019, pro forma financials are expected to exceed $11 billion in revenue and $2.6 billion in EBITDA,excluding synergies. Cost synergies are expected to amount to ~$300 million on a run-rate basis, drivenby procurement synergies, streamlined overhead, and manufacturing efficiencies. Run-rate revenue andEBITDA synergies of $400 million, respectively, are anticipated to be driven by cross-selling opportunitiescoupled with expanded product offerings, capabilities, and end markets.

Givaudan SA (SWX:GIVN) is a Switzerland-based global manufacturer of fragrance and flavor productsfor the Food & Beverage and Personal Care markets. The company generated nearly $6 billion in LTMrevenue with a 20.2% EBITDA margin as of June 2019, according to FactSet. Givaudan has acquiredseven fragrance and flavor businesses in 2019 to bolster its global reach, including the two below:

International Flavors & Fragrances Inc. to merge with Ingredients Business of DuPont de Nemours(December 2019, $26.2 Billion)

Givaudan SA to acquire Cosmetic business of Indena S.p.A. and Ungerer & Company, Inc. (November 2019, Both Undisclosed)

Several notable transactions have been announced or completed in the industry in 2019. Select transactions are outlined below, followed by a more comprehensive list on the following pages.

Chemicals | 2019 Year in Review

NOTABLE TRANSACTIONS

To Acquire

Ungerer & Company, Inc. - Givaudan has agreed to acquire Ungerer & Company (undisclosed), aproducer of flavor and fragrance specialty ingredients, in November. Based in New Jersey, Ungerer’score product offering consists of essential oils, providing natural ingredients for flavor and fragrancecreation. Ungerer’s global presence boasts over 60 countries, with eight manufacturing facilities andsix R&D centers. The deal provides Givaudan with a highly established complementary globalspecialty ingredients player with over 125 years of operational experience, enhancing its U.S. reach.Ungerer is expected to add approximately $250 million in revenue to Givaudan top line on a proforma basis.10

Cosmetic Business of Indena S.p.A. – Givaudan has entered into a definitive agreement to acquirethe Cosmetic business of Indena for an undisclosed amount in November. Headquartered in Milan,Italy, Indena is a global manufacturer of plant-based active ingredients used in Pharmaceutical,Health Food, and Personal Care industries. Indena’s premium botanical active cosmetic ingredientsbusiness will strengthen Givaudan’s Active Beauty segment, providing the company with botanicalexpertise, operational and supply chain synergies, and expanded product offerings for the high-growth plant-based cosmetics applications.9

Nutrition & Biosciences

Enterprise EV / LTMDate Target Acquirer Target Business Description Value (mm) Revenue EBITDA

12/24/19 Ellison Surface Technologies Bodycote Manufactures thermal spray coating and performance

coating solutions. $200.0 4.0x -

12/18/19 Masterbatches of Clariant PolyOne Manufactures color and additive concentrates and

performance solutions for plastics. $1,450.0 1.3x 11.1x

12/16/19 Coatings Business of Ferro Pigments Spain Produces coatings for ceramic tiles. $492.0 ~1.0x -

12/15/19 Ingredients division of DuPont

International Flavors & Fragrances (IFF)

Comprises the Nutrition & Biosciences division which produces food ingredients and fragrances. $26,000.0 - -

12/11/19 Desalitech DuPont de Nemours Manufactures industrial reverse osmosis systems for water purification. - - -

12/06/19 Clearon Dalian BIO-CHEM Produces water treatment chemicals including chlorinated dry bleaches and brominated biocides. $39.1 0.5x -

12/05/19 Icynene-Lapolla Huntsman Manufactures and distributes spray polyurethane foam insulation products. $350.0 1.5x -

11/26/19 Division of Polymer Solutions Group The Jordan Company Comprises the polymer additives business of Polymer

Solutions Group. - - -

11/25/19 AdvanSource Biomaterials Mitsubishi Chemicals Includes the thermoplastic polyurethane elastomer

business of AdvanSource Biomaterials. $7.3 - -

11/08/19 Ungerer & Company Givaudan Produces essential oils, oleoresins, and aroma

chemicals for flavor, fragrance and allied industries. - - -

11/06/19 Brand of Scotts Miracle-Gro Monsanto Comprises the industrial weed control manufacturing

business of Scotts Miracle-Gro. $35.0 - -

10/30/19 Cariflex Business of Kraton Polymers Daelim Manufactures isoprene rubber latex for Medical and

other high-end markets. $530.0 - 10.5x

10/21/19 Nye Lubricants Fuchs Petrolub Formulates synthetic lubricants, thermal coupling compounds, and index-matching optical gels. - - -

10/21/19 Innophos One Rock Capital Produces specialty ingredients with applications in Food, Health, Nutrition, and Industrial markets. $932.0 1.3x 7.8x

10/15/19 Synalloy Universal Stainless & Alloy Products

Manufactures specialty chemicals, such as lubricants, surfactants, and defoamers, and metals. - - -

10/15/19 Andpak ADDEV Materials Offers contract packaging of chemicals for Aerospace, Electronics, Industrial, and Consumer markets. - - -

10/11/19 Haematologic Technologies Edgewater Capital Formulates coagulation proteins, antibodies, and

associated reagents. - - -

09/23/19 Cambrian Solutions Maroon Group Supplies ingredients, additives, and chemicals for

Consumer, Industrial, and Pharmaceutical industries.

09/23/19 Circle Lubricants RelaDyne Distributes lubricants for Automotive, Commercial, and Industrial markets. - - -

09/16/19 Ja-Bar Silicone Nolato Manufactures silicone and other elastomeric materials $9.8 - -

09/06/19 Callery Ascensus Specialties Operates as an inorganic chemicals manufacturer which was previously a division of BASF. - - -

08/28/19 DuBois Chemicals Atlas Partners Develops specialty chemical solutions for metal finishing and water treatment uses, among others. - - -

08/22/19 Epoxies, Etc. Meridian AdhesivesGroup

Produces and sells epoxies, urethanes, silicones, and UV curable systems - - -

Source: Capital IQ, Pitchbook, FactSet, and Capstone Headwaters Research 5

Chemicals | 2019 Year in Review

SELECT TRANSACTIONS

Enterprise EV / LTMDate Target Acquirer Target Business Description Value (mm) Revenue EBITDA

08/13/19 Acetone Derivatives business of Dow ALTIVIA Chemicals Manufactures acetone derivatives. - - -

08/07/19 Cambrex Permira Provides contract development and manufacturing of small molecule pharmaceutical products. $2,500.0 4.3x 16.8x

08/07/19 Two Divisions of Huntsman

Indorama Ventures

Comprises the Chemical Intermediates and Surfactants businesses of Huntsman. $2,076.0 - 5.7x

08/06/19 Zeotherm TPV of Zeon Chemicals RTP Company Comprises the Zeotherm TPV product line of Zeon

Chemicals, offering nylon-based TPV formulations. - - -

07/24/19 Amsyn Maroon Group Distributes specialty chemicals to the coatings, lubricants, pharmaceutical, and other industries. - - -

07/22/19 Dexmet PPG Industries Manufactures precision expanded metals, foils, and polymers. - - -

07/15/19 MPD Chemicals Entegris Manufactures specialty chemicals for complex organic synthesis and unique monomers. $165.0 - -

07/03/19 OMNOVA Solutions Synthomer Provides specialty solutions and performance materials

for various commercial, industrial, and residential uses. $753.0 1.0x 8.7x

07/02/19 PolyCom/Eco Dispersions Meridian Adhesives Manufactures industrial adhesives and coatings. - - -

07/01/19 Preferred Compounding Hexpol Group Provides rubber compounds to markets such as

Industrial, Automotive, and Power & Infrastructure. $232.0 1.0x -

06/28/19 Drew Marine, Technical Court Square Comprises manufacturing of cleaners, dispersants, rust

removers, and rust inhibitors/coatings. - - -

06/21/19 Milliken Infrastructure

Clock Spring Company

Manufactures specialty chemicals, floor coverings, and performance materials. - - -

06/11/19 Business of HB Fuller Tiarco Chemical Comprises surfactants, thickeners, and dispersants

manufacturing business. $71.0 2.8x 8.9x

06/05/19 Legacy Fueling & Lubricants RelaDyne Manufactures and offers lubricants, fueling services,

dust control application, and quality control services. - - -

06/03/19 Advanced Polymer Technologies

Mitsubishi Chemical Advanced Materials

Engages in the production of engineering plastic solutions via polymer conversion technologies. - - -

06/03/19 Prinova Group Nagase America Offers essential oils, fiber, flavor enhancers, food flavors, antioxidants, and aroma chemicals. $663.5 0.9x -

06/03/19 Matreya Cayman Chemical Company Manufactures lipids, bio-chemicals, and bio-markers. - - -

05/16/19 ArrMaz Custom Chemicals Arkema Manufactures and supplies process chemicals,

additives, and solutions. $570.0 2.0X 10.8x

05/15/19 Momentive Performance KCC Produces silicones, silicone derivatives, and

functional silanes. $2,664.9 1.0x 7.4x

05/13/19 Avista Technologies Kurita Manufactures and sells water treatment chemicals. $84.3 2.9x -

05/02/19 Marlin Company Brenntag Provides custom chemical blending, manufacturing, and packaging. - - -

04/29/19 LORD Parker-Hannifin Develops adhesives, coatings, and sensing technologies. $3,675.0 3.6x 16.5x

04/25/19 Specialty Products VersaFlex Manufactures spray-applied polyurea elastomers, polyurea elastomeric coatings, and foam systems. - - -

6

Chemicals | 2019 Year in Review

SELECT TRANSACTIONS (CONTINUED)

Source: Capital IQ, Pitchbook, FactSet, and Capstone Headwaters Research

Enterprise EV / LTMDate Target Acquirer Target Business Description Value (mm) Revenue EBITDA

04/23/19 Synalloy Privet Fund Management

Manufactures and sells metals and specialty chemicals in the U.S. and internationally. $308.9 1.0x 10.9x

04/15/19 Elastocon TPE Technologies Aurora Plastics Manufactures thermoplastic elastomers. - - -

03/18/19 Cristal North American Business INEOS Produces titanium dioxide pigment. $700.0 - -

03/18/19 Process Solutions of Newell Brands

One Rock Capital Partners

Manufactures and sells custom-designed plastic, nylon, and zinc products. $500.0 0.8x -

03/11/19 Chemroy Canada Azelis Distributes specialty chemical and food ingredients. - - -

03/08/19 HB Chemical Ravago Supplies adhesives, pigments, and plasticizers to the Rubber, Plastics, and Coatings markets. - - -

03/05/19 BCC Products Polytek Manufactures and supplies plastic compounds for tooling, mold making, and casting applications. - - -

03/04/19 New England Resins & Pigments Brenntag Distributes specialty chemicals and

packaging products. - - -

03/01/19 Nexeo Solutions Univar Distributes chemicals and plastics products across North America and Asia. $1,962.7 0.5x 9.4x

02/27/19 Versum Materials MERCK Develops and manufactures specialty materials for the Semiconductor and Display industries. $6,514.7 4.7x 14.4x

02/20/19 Clearfield Canola Protection of BASF Corteva Comprises production system that manufactures

herbicide for canola crops. - - -

02/19/19 Chemicals Business of ACETO

New Mountain Capital Group

Comprises specialty performance chemicals manufacturing business. $441.6 - -

02/18/19 Axiom Materials Kordsa Manufactures composite materials including prepreg, adhesive, and ancillary composite products. $182.4 - -

02/12/19 Polymer Concentrates Chroma Color Produces color concentrates for the Plastic industry. - - -

02/08/19 Plastics Distribution of Nexeo Solutions One Rock Capital Distributes chemical and plastic products in

North America. - - -

02/08/19 U.S. Water Services

Kurita Water Industries

Produces chemicals and other solutions for water management and treatment. $270.0 1.6x -

02/05/19 Actagro Nutrien Develops plant nutrient products for the Agriculture industry. $340.0 - -

02/04/19 Dutch Lubricants RelaDyne Distributes industrial and commercial lubricant products. - - -

02/01/19 Sonneborn HollyFrontier Develops, manufactures, and markets plant nutrient products for the agriculture industry. $655.0 1.8x 9.9x

01/30/19 Tantalum Mining/Cabot

Sinomine (Hong Kong) Rare Metals

Comprises specialty mining chemical manufacturing business operations. $130.0 3.0x 13.5x

01/30/19 NC Brands BioLab Manufactures and markets specialty chemicals for enzymes and phosphate removal. - - -

01/16/19 Lubricants Division of Reeder Brenntag AG Comprises a lubricants distribution business. - - -

01/11/19 Florida Chemical Archer-Daniels-Midland

Produces and distributes essential oils and citrus isolates. $175.0 - -

7

Chemicals | 2019 Year in Review

SELECT TRANSACTIONS (CONTINUED)

Source: Capital IQ, Pitchbook, FactSet, and Capstone Headwaters Research

42.3%

21.6%

31.8%27.4%

60.4%

14.8%

24.9% 23.4%30.5%

16.0% 16.6% 15.4%

42.4%

29.3%

14.8%10.9%16.2% 15.0%

11.4% 10.8%14.9% 20.1% 20.2%

14.8%

19.2%

10.3%16.3% 15.4%

25.9%

2.9%0%

10%

20%

30%

40%

50%

60%

70%

80%

Gross Margin % EBITDA Margin %

Source: Capital IQ and Capstone Headwaters Research as of December 31, 2019

Price % 52 Wk Market Enterprise LTM EV / LTMCompany 12/31/19 High Cap Value Revenue EBITDA Margin Revenue EBITDAAkzo Nobel N.V. $101.73 98.4% $20,605.7 $21,855.3 $10,186.5 $1,110.0 10.9% 2.1x 19.7x

Arkema S.A. $106.54 96.4% $8,088.4 $10,135.5 $9,695.8 $1,574.5 16.2% 1.0x 6.4x

Asahi Kasei Corporation $11.34 95.3% $15,611.5 $18,375.8 $20,330.5 $3,042.0 15.0% 0.9x 6.0x

BASF SE $75.65 90.4% $69,388.2 $90,353.9 $67,770.1 $7,740.7 11.4% 1.3x 11.7x

Bayer Aktiengesellschaft $81.90 98.3% $80,235.9 $123,323.9 $50,151.6 $5,397.4 10.8% 2.5x 22.8x

Dow Inc. $54.34 89.8% $40,292.9 $58,619.9 $44,691.0 $6,658.0 14.9% 1.3x 8.8x

DuPont de Nemours, Inc. $62.29 34.6% $46,144.9 $62,783.9 $85,148.0 $17,098.0 20.1% 0.7x 3.7x

Eastman Chemical Company $78.35 90.9% $10,654.0 $16,930.0 $9,444.0 $1,909.0 20.2% 1.8x 8.9x

Exxon Mobil Corporation $69.48 83.2% $293,977.2 $348,707.2 $260,812.0 $38,882.0 14.8% 1.3x 9.0x

Formosa Plastics Corporation $3.32 86.5% $21,158.4 $20,215.7 $6,940.5 $1,334.7 19.2% 2.9x 15.1x

LG Chem, Ltd. $274.52 79.4% $20,073.3 $26,317.9 $23,781.0 $2,441.4 10.3% 1.1x 10.8x

LyondellBasell Industries N.V. $94.09 95.1% $31,370.6 $44,898.6 $35,424.0 $5,757.0 16.3% 1.3x 7.8x

PPG Industries, Inc. $132.92 98.9% $31,430.7 $36,318.7 $15,119.0 $2,334.0 15.4% 2.4x 15.6x

SABIC $24.98 73.2% $74,932.0 $89,461.8 $39,239.8 $10,171.3 25.9% 2.3x 8.8x

Sinopec Shanghai Petrochemical $0.30 55.4% $5,060.5 $3,853.3 $14,313.7 $414.5 2.9% 0.3x 9.3x

Mean 15.0% 1.6x 11.3x

Median 15.0% 1.3x 9.0x

Harmonic Mean 14.3% 1.4x 7.9xEV = enterprise value; LTM = last twelve months$ in millions, except per share data

Last Twelve Month Margin Performance

8

Chemicals | 2019 Year in Review

PUBLIC COMPANY TRADING & OPERATING DATA

Capstone Headwaters maintains an active Industrial & Manufacturing practice in the middle market, with Chemicals being animportant vertical within our focus. This market presence allows Capstone Headwaters to provide chemical companies withup-to-date market data and access to key decision makers among the industry’s most active acquirers and investors.

Capstone Headwaters Advises D.B. Western, Inc. – Texas

Capstone Headwaters announced that it successfully advised D.B. Western,Inc. – Texas (DBWT) on its acquisition by SK Capital Partners. DBWT is aleading producer of formaldehyde, urea-formaldehyde concentrates andMEA Triazines utilizing the most advanced technology in the industry fromits LaPorte, Texas facility, the largest merchant market plant in NorthAmerica.

Steve Beetham, representing the selling shareholders, commented on thetransaction: “We were extremely pleased with Capstone Headwaters whorepresented us in this complex sale process, and optimized all aspects ofthe transaction for our family.”

has been acquired by has been acquired by

has been acquired by has been acquired byhas been acquired by has been acquired by

has been acquired by

D.B. Western - Texas

has acquired has been acquired by

9

Chemicals | 2019 Year in Review

FIRM TRACK RECORD

1. PitchBook, “U.S. PE Breakdown 2019 Annual,” https://files.pitchbook.com/website/files/pdf/2019_Annual_US_PE_Breakdown.pdf, accessed January 20, 2020.

2. Cambrex, “Cambrex to be Acquired by the Permira Funds for $60.00 per Share in Cash,” https://www.cambrex.com/cambrex-to-be-acquired-by-the-permira-funds-for-60-00-per-share-in-cash/, accessed January 20, 2020.

3. Synthomer, “Transaction Announcement,” https://www.synthomer.com/fileadmin/files/ir/omnova_acquisition/Transaction%20Announcement_vFF.pdf, accessed January 20, 2020.

4. Merck, “Acquisition of Versum Materials,” https://www.emdgroup.com/investors/events-and-presentations/webcasts-and-presentations/2019/us/Acquisition-of-Versum-Presentation-US.pdf, accessed January 2020, 2020.

5. CISION, “Univar Completes Acquisition of Nexeo Solutions, Creating Univar Solutions,” https://www.prnewswire.com/news-releases/univar-completes-acquisition-of-nexeo-solutions-creating-univar-solutions-300804889.html, accessed January 20, 2020.

6. BASF, “2019 Factbook,” https://www.basf.com/global/en/investors/calendar-and-publications/factbook.html, accessed January 20, 2020.

7. Kraton, “Kraton Corp. to Sell Cariflex Business Unit to Daelim Industrial,” https://kraton.gcs-web.com/news-releases/news-release-details/kraton-corporation-sell-cariflextm-business-unit-daelim, accessed January 20, 2020.

8. DuPont, “IFF to Merge with DuPont’s Nutrition & Biosciences Business,” https://www.dupont.com/news/iff-to-merge-with-dupont-nutrition-biosciences-business.html, accessed January 20, 2020.

9. Givaudan, “Givaudan to acquire Ungerer,” https://www.givaudan.com/media/media-releases/2019/givaudan-to-acquire-ungerer, accessed January 20, 2020.

10. Givaudan, “Givaudan to Acquire Cosmetics Business of Indena,” https://www.givaudan.com/media/media-releases/2019/givaudan-to-acquire-cosmetics-business-of-indena, accessed January 20, 2020.

Disclosure: This report is a periodic compilation of certain economic and corporate information, as well as completed and announced merger and acquisi-tion activity. Information contained in this report should not be construed as a recommendation to sell or buy any security. Any reference to or omission ofany reference to any company in this report should not be construed as a recommendation to buy, sell or take any other action with respect to any security ofany such company. We are not soliciting any action with respect to any security or company based on this report. The report is published solely for thegeneral information of clients and friends of Capstone Headwaters. It does not take into account the particular investment objectives, financial situation orneeds of individual recipients. Certain transactions, including those involving early-stage companies, give rise to substantial risk and are not suitable for allinvestors. This report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be reliedupon as such. Prediction of future events is inherently subject to both known and unknown risks and other factors that may cause actual results to varymaterially. We are under no obligation to update the information contained in this report. Opinions expressed are our present opinions only and are subjectto change without notice. Additional information is available upon request. The companies mentioned in this report may be clients of Capstone Headwaters.The decisions to include any company in this report is unrelated in all respects to any service that Capstone Headwaters may provide to such company. Thisreport may not be copied or reproduced in any form, or redistributed without the prior written consent of Capstone Headwaters. The information containedherein should not be construed as legal advice.

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Chemicals | 2019 Year in Review

CITATIONS

David BenchManaging Director dbench@capstoneheadwaters.com | 949-734-7888

David is a Managing Director based out of Orange County. Prior to Capstone Headwaters, Davidmanaged the Western region for Morgan Stanley Smith Barney’s Capital Strategies Group and itspredecessor, Citi Capital Strategies. David has focused on middle market investment banking fornearly 32 years and has been the lead banker in over 250 M&A transactions involving both domesticand foreign corporate buyers, as well as leveraged recaps with private equity sponsors. David’sachievements in investment banking have gained national recognition by The M&A Advisor: one of histransactions was awarded the “Private Equity Deal of the Year,” while another was recognized as the“Energy Deal of the Year.” Mr. Bench has also been awarded “Middle Market Financing Professional ofthe Year,” an award recognizing M&A’s most accomplished professionals. Mr. Bench holds a BS andan MBA in Finance from Brigham Young University. He is a Series 7 and 63 Registered SecuritiesRepresentative and a Series 24 Registered Securities Principal.

Doug UsiferManaging Directordusifer@capstoneheadwaters.com | 802-735-2330

Dr. Doug Usifer, Managing Director, joined Capstone Headwaters from Atlas Advisors where hefocused on the firm’s Industrials practice. He has over 20 years of experience in investment bankingand industrial sectors including chemicals, plastics, waste and scrap metal. Prior to Atlas, Doug workedat National Starch as Business Director, Food Emulsions and Encapsulation, where he was GeneralManager of a $40MM global specialty food ingredients business. He also worked on M&Atransactions including National Starch's acquisition of Penford's resistant starch business.

Prior to National Starch, Doug worked at Engelhard Corporation in several capacities, includingBusiness Development Manager, Corporate New Ventures; Marketing Manager, Special EffectPigments; Manager, Technology and Market Development, Performance Additives/Specialty Minerals.While at Engelhard, he worked on M&A transactions including the acquisition of Mearl Corp, a USproducer of pearlescent pigments and iridescent films. He previously worked at Cambrex Corporation(pharmaceutical fine chemicals) and Hoechst Celanese (electronic products and plastics).

Doug holds an executive MBA in Finance from Rutgers University, Ph.D. and MS degrees in OrganicChemistry from Rensselaer Polytechnic Institute, and a BA in Chemistry from Saint Michael's College.

2019

GLOBAL M&A MIDDLE MARKETINVESTMENT BANK OF THE YEAR

2019

INVESTMENT BANKING FIRM OF THE YEAR

2019

TURNAROUND AWARDS

U.S. MIDDLE MARKET INVESTMENT BANK OF THE YEAR

2019

INDEPENDENT INVESTMENT BANKING FIRM OF THE YEAR

2019

GLOBAL M&A MIDDLE MARKETINVESTMENT BANK OF THE YEAR

2019

INVESTMENT BANKING FIRM OF THE YEAR

2019

TURNAROUND AWARDS

U.S. MIDDLE MARKET INVESTMENT BANK OF THE YEAR

2019

INDEPENDENT INVESTMENT BANKING FIRM OF THE YEAR

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Chemicals | 2019 Year in Review

CHEMICALS REPORT CONTRIBUTORS

Christopher CardinaleVice Presidentccardinale@capstoneheadwaters.com | 949-220-0537

Christopher is a Vice President in the Orange County office. He supports management and clients inthe Western Region. Christopher is engaged in the execution and advisory of mergers, acquisitionsand strategic capital raises. Prior to joining Capstone Headwaters, he was an associate with a boutiqueM&A firm focused on valuation, M&A advisory, corporate finance, acquisition target research andexit-planning strategy. His industry experience includes manufacturing, healthcare, TMT andconsumer. Christopher was also a research analyst in the M&A department at United Capital FinancialAdvisors. He earned a BA from the University of San Diego. Christopher is a FINRA Series 79 and 63Registered Securities Representative.

Tracy PatchDirectortpatch@capstoneheadwaters.com | 949-220-0540

Tracy is a Director in the Orange County office, supporting the management of the Western Region.Prior to Capstone Headwaters, Tracy worked as a senior banking professional in Morgan StanleySmith Barney’s Capital Strategies Group and its predecessor, Citi Capital Strategies. She possesses 17years of experience in middle market investment banking, working on both domestic and cross-border transactions. Her previous finance experience includes working in the hedge fund industry withCollins/Bay Island Securities LLC and Talisman Capital. Prior to that, Mrs. Patch worked withinstitutional fixed income sales at Vining Sparks IBG, LP and Robert Thomas Securities, Inc. She alsowas a manager at The Disney Company. Mrs. Patch holds an MBA from Pepperdine University and aBS in Finance from Miami University of Ohio. She is a Series 7 and 63 Registered SecuritiesRepresentative.

John WilsonAssociatejwilson@capstoneheadwaters.com | 802-863-2700

John is an Associate in the Burlington office. He is engaged in the execution and advisory of mergers,acquisitions and strategic capital raises. Prior to joining Capstone Headwaters, he was with GoldmanSachs Asset Management in their fixed income defined contribution division. His industry experienceincludes Chemicals and Waste. He earned a BS and an MBA from the University of Vermont. John is aFINRA Series 79 Registered Securities Representative.

Benjamin Kelly Research Analystbkelly@capstoneheadwaters.com | 617-619-3390

Ben joined Capstone Headwaters in 2018 and serves as an Analyst on the Boston Research Team. Heworks directly with senior investment bankers, utilizing data and market analysis to deliver keyindustry insights to C-suite executives. Ben has a primary focus in the Industrial & Manufacturing andBusiness Services sectors. Prior to joining Capstone Headwaters, Ben worked as an intern at TheBaupost Group within its Portfolio Valuation department. Ben earned a BA in Economics fromProvidence College and is a FINRA Series 79 Registered Securities Representative.

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Chemicals | 2019 Year in Review

CHEMICALS REPORT CONTRIBUTORS (CONTINUED)

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www.capstoneheadwaters.com

Capstone Headwaters is an elite investment banking firm dedicated to serving the corporate finance needs of middle marketbusiness owners, investors and creditors. Capstone Headwaters provides merger & acquisition, private placement, corporaterestructuring and financial advisory services across 16 industry verticals to meet the life cycle needs of emerging enterprises.Headquartered in Boston, MA and Denver, CO, Capstone Headwaters has 19 offices in the US, UK and Brazil with a globalreach that includes over 450 professionals in 40 countries.

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