EXHIBIT 99
AIRGAS LOGO AIR PRODUCTS LOGO
FOR AIRGAS: FOR AIR PRODUCTS:
Investor Contact: Investor Contact:
Melissa Nigro (610) 902-6206 Alexander W. Masetti (610) 481-7461
melissa.nigro@airgas.com masettaw@apci.com
Media Contact: Media Contact:
James Ely (610) 902-6010 Beth K. Mentesana (610) 481-2459
jim.ely@airgas.com mentesbk@apci.com
For release: IMMEDIATELY
AIRGAS TO ACQUIRE MAJORITY OF AIR PRODUCTS' U.S. PACKAGED GAS BUSINESS
RADNOR, PA and ALLENTOWN, PA - January 3, 2002 - Airgas, Inc. (NYSE:
ARG) and Air Products and Chemicals, Inc. (NYSE: APD) today
announced an agreement for Airgas to purchase the majority of Air
Products' U.S. packaged gas business, excluding its electronic gases
and magnetic resonance imaging (MRI)-related helium operations.
Closing would follow receipt of applicable regulatory approvals.
The transaction would have no impact on Air Products' other
businesses, such as tonnage/on-site, merchant liquid bulk,
electronic gases, liquid helium or its non-U.S. packaged gas
businesses.
The acquisition would include approximately 100 facilities in 30
states associated with the filling and distribution of cylinders,
liquid dewars, tube trailers, and other containers of industrial
gases and non-electronic specialty gases, and the retail selling of
welding hardgoods, including customer service centers, warehouses,
and other related assets. The assets to be acquired generated about
$223 million in revenues in fiscal year 2001, and employ
approximately 1,100 people. Approximately 76 percent of the
revenues would be from gas sales and cylinder rent, with the
remainder from welding hardgoods and supplies. The added revenue
would increase the overall Airgas business mix to 52 percent gas and
rent.
Separately, Air Products would sell its packaged gas operations in
the Carolinas and southern Virginia to National Welders Supply
Company, Inc., a joint venture between Airgas and the Turner family
of Charlotte, NC. These Air Products operations include 9 sites,
which generated $17 million in revenues in fiscal year 2001 and
employ about 100 people.
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The value of the transactions to Air Products would be $270
million, including $236 million in cash from Airgas, the proceeds
from the transaction with National Welders, and the accounts
receivable to be retained by Air Products.
In addition to the proposed acquisition, the companies have signed
long-term national supply agreements that would expand their
opportunities to market products and services. Airgas would become
the strategic supplier for Air Products' resale packaged gas needs,
enabling Air Products to continue to meet customers' packaged gas
requirements in critical segments, such as electronics, home
healthcare/MRI, export and certain chemical process industries
(CPI) customers. The arrangements also provide for Air Products to
become a strategic supplier of bulk gases to Airgas, increasing its
supply of liquid oxygen, nitrogen and argon to a minimum of 35
percent of Airgas' total bulk needs. This would allow Air Products
to supply more liquid bulk through Airgas' extensive national
distribution network.
"This landmark transaction is a strong strategic fit with Airgas'
core business, which has continued to generate strong cash flows
and perform well for us," said Airgas Chairman and Chief Executive
Officer Peter McCausland. "This transaction would strengthen our
national network by giving us a presence in some important
geographies. We are pleased to have commitments in place that will
permit us to finance the entire acquisition with senior bank debt,"
he said. "The transaction should be neutral to earnings for the
first couple quarters after closing, excluding a one-time
acquisition charge, as we work to integrate the business, but
accretive after that. It also will be accretive to return on
capital and free cash flow."
"The proposed divestiture is consistent with our portfolio
management process and plays to the strengths of both companies,"
said Robert E. Gadomski, executive vice president of Air Products'
Gases & Equipment Group. Air Products has been undertaking a
rigorous portfolio management process to improve the mix and value
of its growth and core businesses. The portfolio management
process involves examining all opportunities for value creation
along the supply chain, including downstream integration alliances,
new ventures, acquisitions and divestitures.
"We will look to redirect resources and focus on high-growth
businesses where we've built core competencies and leadership
positions. We are the most experienced and diversified producer of
gases, chemicals and services for the global electronics industry;
the world's leading supplier of hydrogen, used widely in the
refining and chemical process industries; the world's leading
supplier of helium, used in areas such as MRI and fiber optics; and
a major supplier of products and services in the growing healthcare
segment," he said.
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Mr. Gadomski explained that the proposed sale would enable Air
Products to divest a domestic business in which it currently holds
a very small share of sales.
"It would allow Air Products to continue our focus on being a
leading U.S. producer of tonnage and merchant liquid bulk gases and
as an innovative pioneer for new applications and service
solutions," Mr. Gadomski added. "We feel we've been successful in
meeting our goal of finding a company like Airgas with the scale,
scope and resources to serve our packaged gas customers."
Mr. McCausland noted that the acquisition of Air Products' non-
electronic specialty gas operations, such as analytical gases,
emission testing, refrigerants and high purity gases, would
strengthen the core competencies of Airgas' Specialty Gas
Operations, enabling it to enhance its competitiveness. Airgas'
and Air Products' non-electronic specialty gas businesses have
several complementary product lines.
Airgas has formed an integration team with dedicated resources to
manage the integration. "The associates who would be coming to
Airgas are well trained people who would be welcome additions to
our team," said Mr. McCausland. "The added scale and capabilities
we are acquiring would also help us achieve our overall long-term
strategic objectives of above-market sales growth and the low-cost
supplier position," added Mr. McCausland.
Most of the acquired operations and personnel would be integrated
with Airgas' 12 regional companies. Non-electronic specialty gas
operations would be integrated with Airgas' Specialty Gas business
unit, and some medical oxygen distribution business would be
incorporated with Airgas' Puritan Medical Products. For more
information on the sites to be acquired and the regional company
alignment, see the acquisition information page at www.airgas.com.
"Our track record of more than 300 successful acquisitions, plus
the functional strength and project management skills we have
gained in the last several years, will help make this transition a
seamless one for our customers," said Mr. McCausland.
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ANALYST TELECONFERENCE SCHEDULED
Airgas will host a teleconference at 10 a.m. EST on January 4,
2002. The presentation materials will be available on the Slide
Presentations page of the Investor Info section of the corporate
website, www.airgas.com, by 6 p.m. today. A webcast of the
teleconference will be available live and on demand through January
25, 2002 on the Conference Calls and Webcasts section of the
website. The teleconference will be available to the public and
media in a listen-only mode. To listen, call 212-547-0138; the
passcode is EARTH. A tape recording of the teleconference will be
available from noon on January 4, 2002, through 5 p.m. on January
25, 2002. To listen, call 402-998-1139.
ABOUT AIRGAS, INC.
Airgas, Inc. (NYSE: ARG) is the largest U.S. distributor of
industrial, medical and specialty gases, welding, safety and
related products. Its integrated network of 700 locations includes
branches, retail stores, gas fill plants, specialty gas labs,
production facilities and distribution centers. Airgas also
distributes its products and services through eBusiness, catalog
and telemarketing channels. Its national scale and strong local
presence offer a competitive edge to its diversified customer base.
For more information, please visit www.airgas.com.
ABOUT AIR PRODUCTS, INC.
Air Products (NYSE: APD) is the world's only combined gases and
chemicals company. Founded more than 60 years ago, the business
has annual revenues of $5.7 billion and operations in 30 countries.
Air Products is a market leader in the global electronics and
chemical processing industries, and a longstanding innovator in
many industrial markets, including coatings, adhesives and
polyurethanes. The company distinguishes itself through its 18,000
employees around the world, who build lasting relationships with
their customers and communities based on understanding, integrity
and passion. For more information, please visit www.airproducts.com.
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FORWARD-LOOKING STATEMENTS
This press release may contain statements that are forward-
looking, as that term is defined by the Private Securities
Litigation Reform Act of 1995 or by the Securities and
Exchange Commission in its rules, regulations and
releases. These statements include, but are not limited
to, statements regarding: the acquisition by Airgas of Air
Products' U.S. packaged gas business and the companies'
expectation that the transaction will close following
regulatory review; Airgas' expectation that the
transaction will strengthen its national network; Air
Products' plan to redirect resources and focus on high-
growth businesses where they have built core competencies;
the expectation by both companies that the reciprocal
supply agreements will expand their opportunities to
market products and services; and Airgas' expectation that
the acquisition will strengthen its specialty gas
operations to compete more effectively with industry
leaders. Airgas and Air Products intend that such forward-
looking statements be subject to the safe harbors created
thereby. All forward-looking statements are based on
current expectations regarding important risk factors and
should not be regarded as a representation by the
Companies or any other person that the results expressed
therein will be achieved. Important factors that could
cause actual results to differ materially from those
contained in any forward-looking statement include the
rejection of the transaction by regulators; customer
acceptance of the acquisition; adverse changes in general
economic conditions; political and economic uncertainties
associated with current world events and other factors
described in Airgas' reports, including Form 10-K dated
March 31, 2001 and Form 10-Q dated September 30, 2001
filed by Airgas with the Securities and Exchange
Commission and Form 10-K dated September 30, 2001 filed by
Air Products with the Securities and Exchange Commission.
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