Registration Statement No. 333-196235


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NameRegistration Statement No. 333-196235
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We may experience claims that our products infringe the intellectual property rights of others, which may cause us to incur unexpected costs or prevent us from selling our products.

 

We seek to improve our business processes and develop new products and applications.  Many of our competitors have a substantial amount of intellectual property that we must continually monitor to avoid infringement.  We cannot guarantee that we will not experience claims that our processes and products infringe issued patents (whether present or future) or other intellectual property rights belonging to others.  For example, we are currently a defendant in a patent infringement claim, which has been vigorously opposed by us, relating to technology that is important to us, although we do not expect this claim to have a material adverse effect on our business, financial conditions and results of operations or reputation.  From time to time, we oppose patent applications that we consider overbroad or otherwise invalid in order to maintain the ability to operate freely in our various business lines without the risk of being sued for patent infringement.  If, however, patents are subsequently issued on any such applications by other parties, or if patents belonging to others already exist that cover our products, processes or technologies, we could experience claims for infringement or have to take other remedial or curative actions to continue our manufacturing and sales activities with respect to one or more products.  Such actions could include payment of damages, stopping the use, obtaining licenses from these parties or substantially re-engineering our products or processes in order to avoid infringement.  We may not be able to obtain the necessary licenses on acceptable terms, or at all, or be able to re-engineer our products successfully.  Moreover, if we are sued for infringement and lose, we could be required to pay substantial damages or be enjoined from using or selling the infringing products or technology.  Further, intellectual property litigation is expensive and time-consuming, regardless of the merits of any claim, and could divert our management’s attention from operating our business.

 

Our relationship with our employees could deteriorate, and certain of our key employees could leave, which could adversely affect our business and our results of operations.

 

Our business involves complex operations and therefore demands a management team and employee workforce that is knowledgeable and expert in many areas necessary for our operations.  As a company focused on manufacturing and highly technical customer service, we rely on our ability to attract and retain skilled employees, including our specialized research and development and sales and service personnel, to maintain our efficient production processes, to drive innovation in our product offerings and to maintain our deep customer relationships.  As of March 31, 2014, we employed approximately 2,000 full-time employees, approximately 1,000 of whom were members of our research and development and sales and service teams.  The departure of a significant number of our highly skilled employees or of one or more employees who hold key regional management positions could have an adverse impact on our operations, including customers choosing to follow a regional manager to one of our competitors.

 

In addition, many of our full-time employees are employed outside the United States.  In certain jurisdictions where we operate, particularly Brazil, France, Germany, Italy and Japan, labor and employment laws are relatively stringent and, in many cases, grant significant job protection to certain employees, including rights on termination of employment.  In addition, in certain countries where we operate, our employees are members of unions or are represented by a works council as required by law.  We are often required to consult and seek the consent or advice of these unions and works councils.  These laws, coupled with the requirement to consult with the relevant unions or works councils, could adversely affect our flexibility in managing costs and responding to market changes and could limit our ability to access the skilled employees on which our business depends.

 

 

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The due diligence undertaken in connection with the MacDermid Acquisition may not have revealed all relevant considerations or liabilities of MacDermid, which could have a material adverse effect on our financial condition or results of operations.

 

There can be no assurance that the due diligence undertaken by us in connection with the MacDermid Acquisition has revealed all relevant facts that may be necessary to evaluate such acquisition.  Furthermore, the information provided during due diligence may have been incomplete, inadequate or inaccurate.  As part of the due diligence process, we have also made subjective judgments regarding the results of operations, financial condition and prospects of MacDermid.  If the due diligence investigation has failed to correctly identify material issues and liabilities that may be present in MacDermid, or if we consider any identified material risks to be commercially acceptable relative to the opportunity, we may incur substantial impairment charges or other losses following the MacDermid Acquisition.  In addition, we may be subject to significant, previously undisclosed liabilities of MacDermid that were not identified during due diligence and which could contribute to poor operational performance and have a material adverse effect on our financial condition and results of operations.

 

Conditions in the global economy may directly adversely affect our net sales, gross profit and financial condition and may result in delays or reductions in our spending that could have a material adverse effect on our results of operations, prospects and share price.

 

Our products are sold in industries that are sensitive to changes in general economic conditions, including the metals and plastics finishings, electronics, oil production and drilling and graphic arts industries.  Accordingly, our net sales, gross profit and financial condition depend significantly on general economic conditions and the demand for our specialty chemical products and services in the markets in which we compete.  Delays or reductions in our customers’ chemical products purchasing that result from economic downturns would reduce demand for our products and services and could, consequently, have a material adverse effect on our results of operations, prospects and share price.

 

Our net sales and gross profit have varied depending on our product, customer and geographic mix for any given period, which makes it difficult to forecast future operating results.

 

Our net sales and gross profit vary among our products and customer groups and markets, and therefore may be different in future periods from historic or current periods.  Overall gross profit margins in any given period are dependent in large part on the product, customer and geographic mix reflected in that period’s net sales.  Market trends, competitive pressures, commoditization of products, increased component or shipping costs, regulatory conditions and other factors may result in reductions in revenue or pressure on the gross profit margins of certain segments in a given period.  Given the nature of our business, the impact of these factors on our business and results of operations will likely vary from period to period and from product to product.  For example, a change in market trends that results in a decline in demand for high margin products will have a disproportionately greater adverse effect on our gross profits for that period.  The varying nature of our product, customer and geographic mix between periods therefore has materially impacted our net sales and gross profit between periods during certain recessionary times and may lead to difficulties in measuring the potential impact of market, regulatory and other factors on our business.  As a result, we may be challenged in our ability to forecast our future operating results.  Further, potential future business acquisitions can compound the difficulty in making comparisons between prior, current and future periods because acquisitions and divestitures, which are not ordinary course events, also affect our gross profit margins and our overall operating results.

 

Our business is significantly influenced by trends and characteristics in the specialty chemical industry and the printing industry.

 

We believe that the specialty chemical industry and the printing industry are cyclical and subject to constant and rapid technological change, product obsolescence, price erosion, evolving standards, short product life-cycles, raw material price fluctuations and changes in product supply and demand.  The specialty chemical industry is currently being affected by globalization and a shift in customers’ businesses while the printing industry is currently shrinking.  The trends and characteristics in these industries may cause significant fluctuations in our results of operations and cash flows and have a material adverse effect on our financial condition.

 

 

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We face intense competition, and our failure to compete successfully may have an adverse effect on our net sales, gross profit and financial condition.

 

Our industry is highly competitive, and most of our product lines compete against product lines from at least two competitors.  We encounter competition from numerous and varied competitors in all areas of our business; however, our most significant competitors are Atotech Inc. (a division of Total S.A.), Enthone Inc. (an Alent plc company) and Rohm and Haas (a division of The Dow Chemical Company) for our Performance Materials segment and Asahi, E.I. du Pont de Nemours and Company (“DuPont”) and Flint Group for our Graphic Solutions segment.  Further, in our Performance Materials segment, our products compete not only with similar products manufactured by our competitors, but also against a variety of chemical and non-chemical alternatives provided by our competitors.  Industry consolidation may result in larger, more homogeneous and potentially stronger competitors in the markets in which we compete.

 

We compete primarily on the basis of quality, technology, performance, reliability, brand, reputation, range of products, and service and support.  We expect our competitors to continue to develop and introduce new products and to enhance their existing products, which could cause a decline in market acceptance of our products.  Our competitors may also improve their manufacturing processes or expand their manufacturing capacity, which could make it more difficult or expensive for us to compete successfully.  In addition, our competitors could enter into exclusive arrangements with our existing or potential customers or suppliers, which could limit our ability, or make it significantly more expensive, to acquire necessary raw materials or to generate sales.

 

Some of our competitors may have greater financial, technical and marketing resources than we do and may be able to devote greater resources to promoting and selling certain products.  Unlike many of our competitors who specialize in a single or limited number of product lines, we have a portfolio of businesses and must allocate resources across those businesses.  As a result, we may invest less in certain areas of our business than our competitors invest in competing businesses, and our competitors may therefore have greater financial, technical and marketing resources available to them with respect to those businesses.

 

Some of our competitors may also incur fewer expenses than we do in creating, marketing and selling certain products and may face fewer risks in introducing new products to the market.  This circumstance results from the nature of our business model, which is based on providing innovative and high quality products and therefore may require that we spend a proportionately greater amount on research and development than some of our competitors.  If our pricing and other factors are not sufficiently competitive, or if there is an adverse reaction to our product decisions, we may lose market share in certain areas, which could adversely affect our net sales, gross profit and our prospects.  Further, because many of our competitors are small divisions of large, international businesses, these competitors may have access to greater resources then we do and may therefore be better able to withstand a change in conditions within our industry and throughout the economy as a whole.

 

If we do not compete successfully by developing and deploying new cost effective products, processes and technologies on a timely basis and by adapting to changes in our industry and the global economy, our net sales, gross profit and financial condition could be adversely affected.

 

Our substantial international operations subject us to risks not faced by domestic competitors, including unfavorable political, regulatory, labor, tax and economic conditions in other countries that could adversely affect our business, financial condition and results of operations.

 

Currently, we operate, or others operate on our behalf, facilities in 24 countries, in addition to our operations in the United States.  We expect sales from international markets to represent an increasing portion of our net sales.  Accordingly, our business is subject to risks related to the different legal, political, social and regulatory requirements and economic conditions of many jurisdictions.  Risks inherent to our international operations include the following:

 

 

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agreements and intellectual property rights may be difficult to enforce and receivables difficult to collect through a foreign country’s legal system;

 

 

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foreign customers may have increased credit risk and different financial conditions, which may necessitate longer payment cycles or result in increased bad debt write-offs or additions to reserves related to our foreign receivables;

 

 

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foreign countries may impose additional withholding taxes or otherwise tax our foreign income, impose tariffs or adopt other restrictions on foreign trade or investment, including currency exchange controls;

 

 

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foreign exchange controls may delay, restrict or prohibit the repatriation of funds, and any restrictions on the repatriation of funds may result in adverse tax consequences and tax inefficiencies;

 

 

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U.S. export licenses may be difficult to obtain;

 

 

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there may be delays and interruptions in transportation of our products;

 

 

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fluctuations in exchange rates may affect product demand and may adversely affect the profitability in U.S. Dollars of products and services provided by us in markets where payment for our products and services is made in currencies other than the U.S. Dollar;

 

 

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general economic conditions in the countries in which we operate, including fluctuations in gross domestic product, interest rates, market demand, labor costs and other factors beyond our control, could have an adverse effect on our net sales in those countries;

 

 

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our results of operations in a particular country could be affected by political or economic instability on a country-specific or global level from various causes, including the possibility of hyperinflationary conditions, natural disasters, terrorist activities and the response to such conditions and events;

 

 

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we may experience difficulties in staffing and managing multi-national operations, including the possibility of labor disputes abroad;

 

 

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unexpected adverse changes in foreign laws or regulatory requirements may occur, including environmental, health and safety laws (such as the European Commission’s REACH regulations) and laws and regulations affecting export and import duties and quotas;

 

 

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compliance with a variety of foreign laws and regulations may be difficult;

 

 

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we may be subject to the risks of divergent business expectations resulting from cultural incompatibility; and

 

 

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overlap of different tax regimes may subject us to additional taxes.

 

Our business in emerging markets requires us to respond to rapid changes in market conditions in these countries.  Our overall success as a global business depends, in part, upon our ability to succeed in different legal, regulatory, economic, social and political conditions.  We cannot assure you that we will succeed in developing and implementing policies and strategies which will be effective in each location where we do business.  Furthermore, any of the foregoing factors or any combination thereof could have a material adverse effect on our business, financial condition and results of operations.

 

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Related:

Registration Statement No. 333-196235 iconRegistration Statement No. 333-182785

Registration Statement No. 333-196235 iconRegistration Statement No. 333-199817

Registration Statement No. 333-196235 iconFiled Pursuant to Rule 424(b)(4) Registration No. 333-194899

Registration Statement No. 333-196235 iconAs filed with the Securities and Exchange Commission on March 31, 2015 Registration No. 333

Registration Statement No. 333-196235 iconSec ”) a Registration Statement on Form s-4 that will include a joint...

Registration Statement No. 333-196235 iconPreparation of the Registration Statement

Registration Statement No. 333-196235 iconRegistration statement pursuant to section 12(b)

Registration Statement No. 333-196235 iconO Registration statement pursuant to Section 12(b) or (g)

Registration Statement No. 333-196235 iconO Registration statement pursuant to Section 12(b) or (g)

Registration Statement No. 333-196235 icon¨ registration statement pursuant to section 12(b) or (g) of the securities exchange act of 1934

Registration Statement No. 333-196235 iconO registration statement pursuant to section 12(b) or (g) of the securities exchange act of 1934

Registration Statement No. 333-196235 iconRegistration statement pursuant to section 12(b) or 12(g) of the securities exchange act of 1934

Registration Statement No. 333-196235 iconX registration statement pursuant to section 12(b) or (g) of the securities exchange act of 1934

Registration Statement No. 333-196235 iconRegistration statement pursuant to section 12(b) or (g) of the securities exchange act of 1934

Registration Statement No. 333-196235 iconRegistration statement pursuant to section 12(b) or 12(g) of the securities exchange act of 1934

Registration Statement No. 333-196235 iconRegistration statement pursuant to section 12(b) or (g) of the securities exchange act of 1934

Registration Statement No. 333-196235 iconRegistration statement pursuant to section 12(b) or 12(g) of the securities exchange act of 1934

Registration Statement No. 333-196235 iconRegistration statement pursuant to section 12(b) or (g) of the securities exchange act of 1934

Registration Statement No. 333-196235 icon[ ] registration statement pursuant to section 12(b) or (g) of the...

Registration Statement No. 333-196235 iconRegistration statement pursuant to section 12(b) or (g) of the securities exchange act of 1934




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