UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. __)
Filed by the Registrant o
Filed by a Party other than the Registrant þ
Check appropriate box:
o Preliminary Proxy Statement
o Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
o Definitive Proxy Statement
o Definitive Additional Materials
þ Soliciting Material under Rule 14a-12
Airgas, Inc.
(Name of Registrant as Specified in Its Charter)
Air Products and Chemicals, Inc.
(Name of Persons Filing Proxy Statement, if Other than Registrant)
Payment of filing fee (Check the appropriate box):
þ No fee required.
o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
| (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): |
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
o Fee paid previously with preliminary materials.
o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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.
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.
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.
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.
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.
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
world
− Diversified across geographies and distribution channels with competitive
positions in all three supply modes: Packaged Gases, Liquid Bulk, Tonnage
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
serve the needs of customers
− Air Products’ leadership in tonnage, strong European and joint venture
packaged gas positions
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
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
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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 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
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%
Gas
90%
Liquid/Bulk
10%
10%
Pro-forma
Air Products
Air Products
Pro-forma
Air Products
Air Products
Airgas
Revenues
Revenues
Airgas
Revenues
Revenues
Air Products
Revenues
Revenues
Air Products
Revenues
Revenues
Liquid/Bulk
17%
17%
Onsite
25%
25%
Equipment
& Services
10%
& Services
10%
Onsite/Pipeline
37%
Liquid/Bulk
24%
Equipment &
Services
Services
14%
Packaged
Gas
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%
Mat’ls
9%
Packaged
Gas
39%
Gas
39%
Offer to Acquire Airgas
Benefits of an integrated industrial gas company
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Liquid/Bulk
Tonnage/Onsites
• Co-product economics
• Liquid back-up
• Sales coverage
• Product supply/outlet
• Broader scope of
industries served
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
Multiple Growth Opportunities
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• 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
positions in Asia
Paul Huck
Air Products Senior Vice President and Chief Financial Officer
12
Offer to Acquire Airgas
• $60.00 per share in cash
• 38% premium comparable to similar transactions
− 10.5x multiple of EBITDA
• Immediate liquidity in an uncertain economic environment
and removes any uncertainly with respect to future stock
performance
and removes any uncertainly with respect to future stock
performance
13
Certain Value for Airgas Shareholders
Immediate
Shareholder Premium
Shareholder Premium
Offer to Acquire Airgas
Financial details
•Transaction value ($billions)
•Committed financing secured
•Maintain investment grade credit rating
•Maintain dividend policy
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Equity Purchase | $5.1 |
Assumption of debt | $1.9 |
Total Consideration | $7.0 |
Offer to Acquire Airgas
Key goals
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• Transaction accretive in the
first year
first year
• Solid shareholder value
• Excludes transaction and
integration costs
integration costs
• Synergies enable greater
cash flow generation
cash flow generation
• Combination provides for
significant margin benefits
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
optimize supply chain
Utilize Air Products’ continuous improvement tools to
optimize supply chain
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
committed to
completing the
transaction
Begin regulatory process
• Prepared to make
appropriate divestitures
appropriate divestitures
Proceed with tender offer if needed
• Financing committed
Litigation
Proxy Contest
• Commenced litigation in
Delaware
Delaware
• Proceed with proxy contest
if needed
if needed
John McGlade
Air Products Chairman, President and CEO
18
Offer to Acquire Airgas
RESULTS
• Accretive to
cash, GAAP EPS
cash, GAAP EPS
Compelling transaction that delivers on
our promises…
our promises…
STABILITY
• Diversified across
geographies and
distribution
channels with
competitive
positions in all three
supply modes
geographies and
distribution
channels with
competitive
positions in all three
supply modes
• Maintain strong
balance
sheet/investment
grade rating
balance
sheet/investment
grade rating
GROWTH
• Highly efficient
re-entry into U.S.
packaged gas
market
re-entry into U.S.
packaged gas
market
• Enhanced growth
opportunities,
domestic and
international
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.