Registration Statement No. 333-196235


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NameRegistration Statement No. 333-196235
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Notes:

(1) Derived from the audited statement of operations of Platform Specialty Products Corporation from April 23, 2013 to December 31, 2013 (Successor Period).

(2) Derived from the audited statement of operations of MacDermid for the ten months ended October 31, 2013 (Predecessor Period).

 

F-78

 

PLATFORM SPECIALTY PRODUCTS CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2013

 

n

Weighted shares outstanding – diluted

 

 

93

 

 

 

n/a

 

 

 

n/a

 

 

 

n/a

 

 

 

 

131

 

o

 

a.

Adjustment to eliminate manufacturer's profit in inventory adjustment in connection with MacDermid acquisition.

 

 

b.

Adjustment to reflect incremental depreciation expense in connection with fair value increases to fixed assets resulting from the MacDermid Acquisition.

 

 

c.

Adjustment to eliminate stock based compensation expense for Director options that vested upon closing of the MacDermid Acquisition.

 

 

d.

Adjustment to eliminate Predecessor stock based compensation expense for awards that vested upon closing of the MacDermid Acquisition.

 

 

e.

Adjustment to eliminate non-recurring MacDermid acquisition related expenses, including but not limited to financial advisory fees, attorney’s fees and accountants fees, recorded during the year ended December 31, 2013.

 

 

f.

Adjustment to eliminate recorded amortization expenses on MacDermid’s intangible assets.



 

g.

Adjustment to reflect amortization expense to be recorded in conjunction with the estimated fair value of the intangible assets of MacDermid as of the closing date based on a preliminary outside valuation by a third party obtained by Platform subsequent to closing and broken down as follows:

 

(In thousands)

 

 

Asset

Estimated Fair Value

Annual Amortization

Trade names-indefinite lives

$73,000

$ —

Technology (7-10 years)

$155,000

$16,800

Customer relationships (8-20 years)

$459,000

$36,600

 

Annual amortization is calculated as Estimated Fair Value divided by the calculated life of the related asset


 

h.

Adjustment to reflect Platform’s recording of a one-time, non-cash expense of $172 million upon the closing of the acquisition, which represents the fair value of the founder preferred dividend rights at that time. As this will not have an ongoing impact to the income statement, it is presented as an adjustment in the pro forma statements of operations. This estimate was calculated using a monte carlo simulation that simulates the daily price of shares over the potential dividend period with an estimate of volatility and interest to arrive at an estimated fair value of future dividend payments as of October 31, 2013



 

i.

Adjustment to eliminate recorded interest expense at MacDermid for indebtedness not assumed at closing.



 

j.

Adjustment to record interest expense related to indebtedness assumed comprised of the following:



 



Interest on the first lien debt of $753 million at a rate of approximately 4% based on the terms of the credit agreement. Such interest rate is based on an applicable margin of 3% applied to a LIBOR floor of 1% and is variable in nature. The pre-tax effect of a 1/8% change effective interest rate would be $0.9 million annually.

 

 



Amortization of deferred financing fees of $1.8 million for the first lien term debt over the five year life of the loan.



 



Interest on other assumed indebtedness ($44,000 of interest annually).



 

k.

Adjustment to reflect income tax expense related to the earnings (loss) before taxes generated by the pro forma adjustments based upon the estimated applicable statutory tax rates. The Company’s estimated United States statutory tax rate of approximately 38% was applied to interest expense in the United States, where the debt resides as well as to the portion of acquisition costs which were incurred in the US and to stock compensation.  Additionally, the applicable blended rates were applied to inventory, amortization, depreciation and predecessor stock compensation.



 

l.

Adjustment to reflect the non-controlling interest represented by equity interests in a subsidiary of Platform provided as a portion of the consideration of the acquisition. Such equity interest represents 6.76% of Platform multiplied by the pro forma combined net income before such adjustment.



 

m.

Adjustment to reflect the elimination of dividends paid to sellers for an equity interest which has been repaid and eliminated in conjunction with the MacDermid Acquisition.



 

n.

Represents the number of Platform ordinary shares outstanding at the closing consisting of 88.5 million ordinary shares outstanding before the closing, approximately 14 million shares issued in the Platform Warrant Exchange Offer, the proceeds of which were used to fund a portion of the cash consideration for the MacDermid Acquisition and 2 million ordinary shares of consideration issued in connection with the purchase of the MacDermid 401(k) plan.

 

 

F-79

 

PLATFORM SPECIALTY PRODUCTS CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2013

 

 

o.

Represents the Platform ordinary shares outstanding plus (i) 250,000 options outstanding; (ii) approximately 9 million ordinary share equivalents based upon the $97 million of equity interests delivered in connection with the Merger; (iii) 2 million ordinary share equivalents for convertible preferred shares outstanding; and (iv) 16 million ordinary share equivalents issuable upon conversion of the remaining Platform warrants outstanding.

 

 

 

 

 

 

 

F-80

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
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