Form 424B3 SCHWEITZER MAUDUIT INTER

May 23, 2022 6:16 AM EDT

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Filed Pursuant to Rule 424(b)(3)
Registration Statement No. 333-264676

 

 

LOGO    LOGO

MERGER PROPOSED—YOUR VOTE IS VERY IMPORTANT

To the Stockholders of Schweitzer-Mauduit International, Inc. and the Stockholders of Neenah, Inc.:

On March 28, 2022, Schweitzer-Mauduit International, Inc. (which we refer to as “SWM”) and Neenah, Inc. (which we refer to as “Neenah”) entered into an Agreement and Plan of Merger (which, as amended from time to time, we refer to as the “merger agreement”) that provides for the combination of the two companies in a merger of equals. Under the merger agreement, Samurai Warrior Merger Sub, Inc., a wholly owned subsidiary of SWM, will merge with and into Neenah, with Neenah continuing as the surviving corporation and a wholly owned subsidiary of SWM, in a transaction we refer to as the “merger.”

The boards of directors of SWM and Neenah (which we refer to as the “SWM board of directors” and the “Neenah board of directors,” respectively) have each unanimously approved the merger. Pursuant to the terms and subject to the conditions set forth in the merger agreement, at the effective time of the merger, each outstanding share of Neenah common stock, par value $0.01 per share (which we refer to as the “Neenah common stock”), will (other than certain shares owned by SWM or any of its wholly owned subsidiaries or Neenah or any of its wholly owned subsidiaries) be converted into the right to receive 1.358 shares (which we refer to as the “exchange ratio” and such shares, the “merger consideration”) of SWM common stock, par value $0.10 per share (which we refer to as the “SWM common stock”).

Although the number of shares of SWM common stock that each holder of Neenah common stock (which we refer to as the “Neenah stockholders”) will receive is fixed, the market value of the merger consideration will fluctuate based on the market price of SWM common stock and will not be known at the time Neenah stockholders vote on the merger or SWM stockholders vote on the share issuance. Based on the $30.23 closing price of SWM common stock on March 25, 2022, the last trading day before public announcement of the merger, the exchange ratio represented approximately $41.05 in value for each share of Neenah common stock. Based on the $26.31 closing price per share of SWM common stock on May 20, 2022, the latest practicable trading day before the date of the enclosed joint proxy statement/prospectus, the exchange ratio represented approximately $35.73 in value for each share of Neenah common stock. We urge you to obtain current market quotations for shares of SWM common stock (currently traded on the New York Stock Exchange under the trading symbol “SWM”) and shares of Neenah common stock (currently traded on the New York Stock Exchange under the trading symbol “NP”).

We estimate that, upon completion of the merger, Neenah stockholders as of immediately prior to the merger will collectively own approximately 42% of the outstanding shares of the combined company immediately after the merger, and holders of SWM common stock (which we refer to as the “SWM stockholders”) as of immediately prior to the merger will collectively own approximately 58% of the outstanding shares of the combined company immediately after the merger (in each case, on a fully diluted basis and without regard to the fact that immediately prior to the merger certain stockholders may own both SWM common stock and Neenah common stock).

SWM will hold a special meeting (which we refer to as the “SWM special meeting”) of the SWM stockholders virtually, via live webcast on the Internet at www.cesonlineservices.com/swm22_vm on June 29, 2022, at 8:00 a.m., Eastern Time. At the SWM special meeting, the SWM stockholders will be asked (i) to approve the issuance of SWM common stock, pursuant to the terms of the merger agreement, in an amount necessary to complete the merger and the other transactions contemplated by the merger agreement (which we refer to as the “SWM share issuance proposal”), and (ii) to consider and vote on a proposal to approve the adjournment of the SWM special meeting from time to time, if determined by the chairperson of such meeting to be necessary or appropriate, including adjournment to permit further solicitation of proxies in favor of the SWM share issuance proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to SWM stockholders (which we refer to as the “SWM adjournment proposal”).


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The SWM board of directors has unanimously (i) approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger, (ii) determined that the merger agreement and the transactions contemplated thereby are fair to, and in the best interests of, SWM and its stockholders and (iii) resolved to recommend that the SWM stockholders approve the SWM share issuance proposal.

Neenah will hold a special meeting (which we refer to as the “Neenah special meeting”) of the Neenah stockholders virtually, via live webcast on the Internet at www.virtualshareholdermeeting.com/NP2022SM on June 29, 2022, at 9:00 a.m., Eastern Time. At the Neenah special meeting, the Neenah stockholders will be asked (i) to consider and vote on a proposal to approve and adopt the merger agreement and the transactions contemplated thereby, including the merger (which we refer to as the “Neenah merger proposal”), (ii) to consider and vote on a non-binding advisory proposal to approve the compensation that may be paid or become payable to the named executive officers of Neenah that is based on or otherwise relates to the merger (which we refer to as the “Neenah compensation proposal”), and (iii) to consider and vote on a proposal to approve the adjournment of the Neenah special meeting from time to time, if determined by the chairperson of the meeting to be necessary or appropriate, including adjournment to permit further solicitation of proxies in favor of the Neenah merger proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to Neenah stockholders (which we refer to as the “Neenah adjournment proposal”).

The Neenah board of directors has unanimously (i) determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable, fair to and in the best interests of Neenah and its stockholders, (ii) approved and adopted the merger agreement and the execution, delivery and performance by Neenah of the merger agreement and the transactions contemplated thereby, including the merger, and (iii) recommended that Neenah’s stockholders approve the merger proposal.

The enclosed joint proxy statement/prospectus describes the Neenah special meeting, the SWM special meeting, the merger, the documents related to the merger, including the merger agreement, and other related matters. Please carefully read the entire joint proxy statement/prospectus, including the “Risk Factors,” beginning on page 38, for a discussion of the risks relating to the proposed merger.

Each of our board of directors unanimously recommends that stockholders vote “FOR” each of the proposals to be considered at the respective special meetings. We strongly support this combination of our companies and join our boards in their recommendations.

 

LOGO   

LOGO

John D. Rogers

Non-Executive Chairman

Schweitzer-Mauduit International, Inc.

  

William M. Cook

Non-Executive Chairman

Neenah, Inc.

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued in the merger or passed upon the adequacy or accuracy of this joint proxy statement/prospectus. Any representation to the contrary is a criminal offense.

The date of this joint proxy statement/prospectus is May 20, 2022, and it is first being mailed or otherwise delivered to the SWM stockholders and the Neenah stockholders on or about May 23, 2022.


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LOGO

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

To the Stockholders of Schweitzer-Mauduit International, Inc.:

On March 28, 2022, Schweitzer-Mauduit International, Inc. (which we refer to as “SWM”) and Neenah, Inc. (which we refer to as “Neenah”) entered into an Agreement and Plan of Merger (which, as amended from time to time, we refer to as the “merger agreement”) that provides for the combination of the two companies in a merger of equals. Under the merger agreement, Samurai Warrior Merger Sub, Inc., a wholly owned subsidiary of SWM, will merge with and into Neenah, with Neenah continuing as the surviving corporation and a wholly owned subsidiary of SWM, in a transaction we refer to as the “merger.”

SWM will hold a special meeting of holders of common stock of SWM (who we refer to as “SWM stockholders”) virtually via live webcast on the Internet at www.cesonlineservices.com/swm22_vm, on June 29, 2022, at 8:00 a.m. Eastern Time (which we refer to as the “SWM special meeting”), to consider and vote upon the following matters:

 

   

a proposal to approve the issuance of SWM common stock, par value $0.10 per share (which we refer to as the “SWM common stock”), pursuant to the terms of the merger agreement, in an amount necessary to complete the merger and the other transactions contemplated by the merger agreement (which we refer to as the “SWM share issuance proposal”); and

 

   

a proposal to approve the adjournment of the SWM special meeting from time to time, if determined by the chairperson of the meeting to be necessary or appropriate, including adjournment to permit further solicitation of proxies in favor of the SWM share issuance proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to SWM stockholders (which we refer to as the “SWM adjournment proposal”).

SWM has fixed the close of business on May 20, 2022, as the record date for the SWM special meeting and any adjournment or postponement thereof. Only SWM stockholders of record at that time are entitled to notice of, and to vote at, the SWM special meeting, or any adjournment or postponement of the SWM special meeting. During the SWM special meeting, SWM stockholders will be able to examine the list of the stockholders entitled to vote at the SWM special meeting by following the instructions on the live webcast. SWM stockholders may attend the SWM special meeting, access the stockholders list, submit questions and vote their shares via the Internet during the meeting by visiting www.cesonlineservices.com/swm22_vm. In order to attend the virtual meeting, you will need to pre-register by 8:00 a.m. Eastern Time on June 28, 2022 by visiting such website. To enter the SWM special meeting, SWM stockholders will need the control number that is printed on their proxy cards. SWM recommends that SWM stockholders log in at least fifteen minutes before the meeting to ensure that they are logged in when the meeting starts. Online check-in will start shortly before the meeting on June 29, 2022.

Approval of each of the SWM share issuance proposal and the SWM adjournment proposal requires the affirmative vote of a majority of the shares of SWM common stock which are present in person (via the Internet) or by proxy at the SWM special meeting and entitled to vote thereon.

The SWM board of directors has unanimously (i) approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger, (ii) determined that the merger agreement and the transactions contemplated thereby are fair to, and in the best interests of, SWM and its stockholders and (iii) resolved to recommend that the SWM stockholders approve the SWM share issuance proposal. The SWM board of directors unanimously recommends that SWM stockholders vote “FOR” the SWM share issuance proposal and “FOR” the SWM adjournment proposal.

Your vote is very important. SWM and Neenah cannot complete the merger unless SWM’s stockholders approve the SWM share issuance proposal.


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Regardless of whether you plan to attend the SWM special meeting in person (via the Internet), please vote as soon as possible by following the voting procedures described on the proxy card.

SWM will not transact any business at the SWM special meeting, except such business as may properly be brought before the SWM special meeting or any adjournments or postponements thereof by or at the direction of the SWM board of directors.

The enclosed joint proxy statement/prospectus provides a detailed description of the SWM special meeting, the merger, the documents related to the merger and other related matters. We urge you to read the joint proxy statement/prospectus, including any documents incorporated in the joint proxy statement/prospectus by reference, and its annexes carefully and in their entirety.

 

BY ORDER OF THE BOARD OF DIRECTORS
LOGO

Ricardo Nuñez

Executive Vice President, General Counsel and Secretary

Schweitzer-Mauduit International, Inc.


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LOGO

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

To the Stockholders of Neenah, Inc.:

Neenah, Inc. (which we refer to as “Neenah”) will hold a special meeting (which we refer to as the “Neenah special meeting”) of holders of common stock of Neenah (who we refer to as “Neenah stockholders”) virtually via live webcast on the Internet at www.virtualshareholdermeeting.com/NP2022SM, on June 29, 2022, at 9:00 a.m. Eastern Time to consider and vote upon the following matters:

 

   

a proposal to approve and adopt the Agreement and Plan of Merger, dated as of March 28, 2022, as it may be amended from time to time (which agreement we refer to as the “merger agreement”) by and between Schweitzer-Mauduit International, Inc. (which we refer to as “SWM”), Neenah and Samurai Warrior Merger Sub, Inc. (which we refer to as “Merger Sub”), a copy of which is enclosed as Annex A, pursuant to which and subject to the terms and conditions therein, Merger Sub will merge with and into Neenah, with Neenah continuing as the surviving corporation (which transaction we refer to as the “merger”), and the other transactions contemplated thereby (which we refer to as the “Neenah merger proposal”);

 

   

a proposal to approve, on an advisory (non-binding) basis, the compensation that may be paid or become payable to Neenah’s named executive officers that is based on or otherwise relates to the merger (which we refer to as the “Neenah compensation proposal”); and

 

   

a proposal to approve the adjournment of the Neenah special meeting from time to time, if determined by the chairperson of the meeting to be necessary or appropriate, including adjournments to permit further solicitation of proxies in favor of the Neenah merger proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to Neenah stockholders (which we refer to as the “Neenah adjournment proposal”).

Neenah has fixed the close of business on May 20, 2022, as the record date for the Neenah special meeting and any adjournment or postponement thereof. Only Neenah stockholders of record at that time are entitled to notice of, and to vote at, the Neenah special meeting, or any adjournment or postponement of the Neenah special meeting. During the Neenah special meeting, Neenah stockholders will be able to examine the list of the stockholders entitled to vote at the Neenah special meeting by following the instructions on the live webcast. Neenah stockholders may attend the Neenah special meeting, access the stockholders list, submit questions and vote their shares via the Internet during the meeting by visiting www.virtualshareholdermeeting.com/NP2022SM and using the 16-digit control number found on their proxy cards. Neenah recommends that Neenah stockholders log in at least fifteen minutes before the meeting to ensure that they are logged in when the meeting starts. Online check-in will start shortly before the meeting on June 29, 2022.

Approval of the Neenah merger proposal requires the affirmative vote of holders of two-thirds of the outstanding shares of common stock, $0.01 par value per share, of Neenah (which we refer to as “Neenah common stock”), entitled to vote on the Neenah merger proposal. Approval of each of the Neenah compensation proposal and the Neenah adjournment proposal requires the affirmative vote of the holders of a majority in voting power of the shares of Neenah common stock which are present in person (via the Internet) or by proxy at the Neenah special meeting and entitled to vote thereon.

The board of directors of Neenah (which we refer to as the “Neenah board of directors”) has unanimously (i) determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable, fair to and in the best interests of Neenah and its stockholders, (ii) approved and adopted the merger agreement and the execution, delivery and performance by Neenah of the merger agreement and the transactions contemplated thereby, including the merger, and (iii) recommended that Neenah’s stockholders approve the


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merger proposal. The Neenah board of directors unanimously recommends that Neenah stockholders vote “FOR” the Neenah merger proposal, “FOR” the Neenah compensation proposal and “FOR” the Neenah adjournment proposal.

Your vote is very important. SWM and Neenah cannot complete the merger unless Neenah’s stockholders approve the Neenah merger proposal.

Regardless of whether you plan to attend the Neenah special meeting in person (via the Internet), please vote as soon as possible by following the voting procedures described on the proxy card. If you do not vote or if you submit a proxy card on which you indicate that you abstain from voting on the Neenah merger proposal, it will have the same effect as a vote “AGAINST” against the Neenah merger proposal.

Neenah will not transact any business at the Neenah special meeting, except such business as may properly be brought before the Neenah special meeting or any adjournments or postponements thereof by or at the direction of the Neenah board of directors.

The enclosed joint proxy statement/prospectus provides a detailed description of the Neenah special meeting, the merger, the documents related to the merger, including the merger agreement, and other related matters. We urge you to read the joint proxy statement/prospectus, including any documents incorporated in the joint proxy statement/prospectus by reference, and its annexes carefully and in their entirety.

 

BY ORDER OF THE BOARD OF DIRECTORS

LOGO

Noah S. Benz

Executive Vice President, General Counsel and Secretary

Neenah, Inc.


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REFERENCES TO ADDITIONAL INFORMATION

This joint proxy statement/prospectus incorporates important business and financial information about SWM and Neenah from documents filed with the U.S. Securities and Exchange Commission (which we refer to as the “SEC”) that are not included in or delivered with this joint proxy statement/prospectus. You can obtain any of the documents filed with or furnished to the SEC by SWM and/or Neenah at no cost from the SEC’s website at http://www.sec.gov. You may also request copies of these documents, including documents incorporated by reference in this joint proxy statement/prospectus, at no cost by contacting the appropriate company at the following address:

 

Schweitzer-Mauduit International, Inc.

100 North Point Center East, Suite 600

Alpharetta, Georgia 30022

Attention: Investor Relations

Telephone: (770) 569-4229

  

Neenah, Inc.

3460 Preston Ridge Road, Suite 600

Alpharetta, Georgia 30005

Attention: Investor Relations

Telephone: (678) 566-6500

You will not be charged for any of these documents that you request. To obtain timely delivery of these documents, you must request them no later than five (5) business days before the date of the applicable special meeting. This means that SWM stockholders requesting documents must do so by June 22, 2022, and Neenah stockholders requesting documents must do so by June 22, 2022.

You should rely only on the information contained in, or incorporated by reference into, this document. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this document. This document is dated May 20, 2022, and you should assume that the information in this document is accurate only as of such date. You should assume that the information incorporated by reference into this document is accurate as of the date of such incorporated document. Neither the mailing of this document to SWM stockholders or Neenah stockholders, nor the issuance by SWM of shares of SWM common stock in connection with the merger, will create any implication to the contrary.

For more information, please see “Where You Can Find More Information” beginning on page 188.

ABOUT THIS DOCUMENT

SWM has supplied all information contained in or incorporated by reference into this joint proxy statement/prospectus relating to SWM. Neenah has supplied all information contained in or incorporated by reference into this joint proxy statement/prospectus relating to Neenah. SWM and Neenah have both contributed information relating to the merger.

This joint proxy statement/prospectus forms a part of a Registration Statement on Form S-4 (Registration No. 333-264676) filed by SWM with the SEC. It constitutes a prospectus of SWM under Section 5 of the Securities Act of 1933, as amended (which we refer to as the “Securities Act”), and the rules thereunder, with respect to the shares of SWM common stock to be issued to Neenah stockholders in the merger. It also constitutes a proxy statement under Section 14(a) of the Securities Exchange Act of 1934, as amended (which we refer to as the “Exchange Act”) and a notice of meeting and action to be taken with respect to the SWM special meeting at which SWM stockholders will consider and vote on the SWM share issuance proposal and the other proposals described in this joint proxy statement/prospectus.

In addition, this document constitutes a proxy statement under Section 14(a) of the Exchange Act and a notice of meeting and action to be taken with respect to (i) the SWM special meeting at which SWM stockholders will consider and vote on the SWM share issuance proposal and the SWM adjournment proposal and (ii) the Neenah special meeting at which Neenah stockholders will consider and vote on the Neenah merger proposal, the Neenah compensation proposal and the Neenah adjournment proposal, all as described in this joint proxy statement/prospectus.

This document does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction in which or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.


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TABLE OF CONTENTS

 

     Page  

QUESTIONS AND ANSWERS

     1  

SUMMARY

     14  

SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF SWM

     26  

SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF NEENAH

     28  

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

     30  

COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA

     31  

COMPARATIVE PER SHARE MARKET PRICES AND IMPLIED VALUE OF MERGER CONSIDERATION

     33  

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     35  

RISK FACTORS

     38  

INFORMATION ABOUT THE COMPANIES

     46  

THE SWM SPECIAL MEETING

     48  

Date, Time and Place of Meeting

     48  

Matters to Be Considered

     48  

Recommendation of the SWM Board of Directors

     48  

SWM Record Date and Quorum

     48  

Votes Required; Effect of Abstentions and Failure to Vote

     48  

Shares Held by Officers and Directors

     49  

Voting of Proxies

     49  

Shares Held in “Street Name”; Broker Non-Votes

     50  

Revocability of Proxies and Changes to an SWM Stockholder’s Vote

     50  

Solicitation of Proxies

     51  

Householding of Proxy Materials

     51  

Attending the SWM Special Meeting in Person (via the Internet)

     51  

Assistance

     52  

SWM PROPOSALS

     53  

Proposal No. 1—SWM Share Issuance Proposal

     53  

Proposal No. 2—SWM Adjournment Proposal

     53  

THE NEENAH SPECIAL MEETING

     54  

Date, Time and Place of Meeting

     54  

Matters to Be Considered

     54  

Recommendation of the Neenah Board of Directors

     54  

Neenah Record Date and Quorum

     54  

Votes Required; Effect of Abstentions and Failure to Vote

     54  

Shares Held by Officers and Directors

     56  

Voting of Proxies

     56  

Shares Held in “Street Name”; Broker Non-Votes

     57  

Revocability of Proxies and Changes to a Neenah Stockholder’s Vote

     57  

Solicitation of Proxies

     57  

Householding of Proxy Materials

     58  

Attending the Neenah Special Meeting in Person (via the Internet)

     58  

Assistance

     58  

NEENAH PROPOSALS

     59  

Proposal No. 1—Neenah Merger Proposal

     59  

Proposal No. 2—Neenah Compensation Proposal

     59  

Proposal No. 3—Neenah Adjournment Proposal

     59  

THE MERGER

     61  

Terms of the Merger

     61  

Background of the Merger

     61  

 

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SWM’s Reasons for the Merger; Recommendation of SWM’s Board of Directors

     80  

Opinion of SWM’s Financial Advisor

     83  

Neenah’s Reasons for the Merger; Recommendation of Neenah’s Board of Directors

     92  

Opinion of Neenah’s Financial Advisor

     96  

Certain Unaudited Prospective Financial Information

     103  

Interests of SWM’s Directors and Executive Officers in the Merger

     107  

Interests of Neenah’s Directors and Executive Officers in the Merger

     111  

Governance of the Combined Company

     117  

Accounting Treatment of the Merger

     119  

Closing; Effective Time

     119  

Regulatory Approvals

     119  

Description of Financing

     120  

Ownership of the Combined Company after the Merger

     123  

Material U.S. Federal Income Tax Consequences of the Merger

     123  

Exchange of Shares

     126  

NYSE Listing of Shares of SWM Common Stock; Delisting and Deregistration of Neenah Common Stock

     127  

Appraisal Rights

     127  

Litigation Related to the Merger

     127  

THE MERGER AGREEMENT

     128  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     152  

Unaudited Pro Forma Condensed Combined Balance Sheet

     154  

Unaudited Pro Forma Condensed Combined Statement of Income

     155  

Notes to the Unaudited Pro Forma Condensed Combined Financial Statements

     157  

DESCRIPTION OF SWM CAPITAL STOCK

     167  

COMPARISON OF THE RIGHTS OF SWM STOCKHOLDERS’ AND NEENAH STOCKHOLDERS’

     171  

APPRAISAL RIGHTS

     184  

LEGAL MATTERS

     185  

EXPERTS

     185  

SWM

     185  

Neenah

     185  

DEADLINE FOR SUBMITTING STOCKHOLDER PROPOSALS

     186  

SWM

     186  

Neenah

     186  

WHERE YOU CAN FIND MORE INFORMATION

     188  

ANNEX A—Agreement and Plan of Merger

     A-1  

ANNEX B—Fairness Opinion of J.P. Morgan Securities, LLC

     B-1  

ANNEX C—Fairness Opinion of Perella Weinberg Partners LP

     C-1  

ANNEX D—Form of Bylaw Amendment

     D-1  

 

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QUESTIONS AND ANSWERS

The following are some questions that you may have about the merger and the SWM and Neenah special meetings, and brief answers to those questions. We urge you to read carefully the remainder of this joint proxy statement/prospectus because the information in this section does not provide all of the information that might be important to you with respect to the merger, or the SWM and Neenah special meetings. Additional important information is also contained in the documents incorporated by reference into this joint proxy statement/prospectus. Please see “Where You Can Find More Information” beginning on page 188.

 

Q:

Why am I receiving this joint proxy statement/prospectus?

 

A:

You are receiving this joint proxy statement/prospectus because SWM and Neenah have agreed to combine their companies in a merger of equals, structured as a merger of Merger Sub with and into Neenah, with Neenah continuing as the surviving corporation in the merger and a wholly owned subsidiary of SWM. A copy of the merger agreement, which provides for the merger, is attached as Annex A to this joint proxy statement/prospectus and is incorporated by reference herein.

To complete the merger, among other things:

 

   

SWM stockholders must approve the issuance of shares of SWM common stock pursuant to the terms of the merger agreement, in an amount necessary to complete the merger and the other transactions contemplated by the merger agreement; and

 

   

Neenah stockholders must approve and adopt the merger agreement and the merger.

SWM is holding a special meeting of SWM stockholders to obtain approval of the SWM share issuance proposal. SWM stockholders will also be asked to approve the proposal to adjourn the SWM special meeting from time to time if determined by the chairperson of the meeting to be necessary or appropriate, including adjournment to permit further solicitation of proxies in favor of the SWM share issuance proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to SWM stockholders. The approval of the SWM adjournment proposal by the SWM stockholders is not required to complete the merger.

Neenah is holding a special meeting of Neenah stockholders to obtain approval of the Neenah merger proposal. Neenah stockholders will also be asked to (i) approve, on an advisory (non-binding) basis, the compensation that may be paid or become payable to Neenah’s named executive officers that is based on or otherwise relates to the merger, and (ii) approve the proposal to adjourn the Neenah special meeting from time to time, if determined by the chairperson of the meeting to be necessary or appropriate, including adjournment to permit further solicitation of proxies in favor of the Neenah merger proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to Neenah stockholders. Neither the approval of the Neenah compensation proposal nor the approval of the Neenah adjournment proposal by the Neenah stockholders is required to complete the merger.

This document is also a prospectus that is being delivered to Neenah stockholders because, in connection with the merger, SWM is offering shares of SWM common stock to Neenah stockholders.

This joint proxy statement/prospectus contains important information about the merger agreement, the merger and the other proposals being voted on at the SWM and Neenah special meetings. You should read it carefully and in its entirety. The enclosed materials allow you to have your shares of common stock voted by proxy without attending your meeting. Your vote is important and we encourage you to submit your proxy as soon as possible.

 

Q:

What will happen in the merger?

 

A:

In the merger, Merger Sub will merge with and into Neenah, with Neenah continuing as the surviving corporation and a wholly owned subsidiary of SWM. Each share of Neenah common stock issued and

 

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  outstanding immediately prior to the effective time of the merger (which we refer to as the “effective time”) (other than certain shares owned by SWM or any of its wholly owned subsidiaries, including Merger Sub, or Neenah or any of its wholly owned subsidiaries) will be converted into the right to receive 1.358 shares of SWM common stock. After completion of the merger, Neenah will no longer be a public company, and Neenah common stock will be delisted from the NYSE, will be deregistered under the Exchange Act, and will cease to be publicly traded. SWM stockholders will continue to own their existing shares of common stock. Following the merger, shares of SWM common stock will continue to be traded on the NYSE. SWM will change the name and the NYSE ticker symbol of the combined company to such new name and ticker symbol as mutually agreed upon by SWM and Neenah, which change may occur as of or after the effective time. See “The Merger Agreement—Structure of the Merger” beginning on page 128 and the merger agreement for more information about the merger.

 

Q:

Who will be the CEO and members of the board of directors of the combined company following the merger?

 

A:

Effective as of the effective time, Ms. Schertell, the current Chief Executive Officer and President of Neenah, will serve as the Chief Executive Officer of the combined company, and Dr. Jeffrey Kramer, the current Chief Executive Officer of SWM, will serve as a strategic advisor for the combined company. The new combined company board of directors will consist of nine (9) directors, of which:

 

   

five (5) directors will be designated by SWM, consisting of Dr. John D. Rogers, as non-executive chairman, Dr. Kimberly E. Ritrievi, Anderson D. Warlick, Jeffrey Keenan and Marco Levi, each of whom are independent; and

 

   

four (4) directors will be designated by Neenah, consisting of Ms. Schertell, Shruti Singhal, Tony R. Thene and William M. Cook, each of whom are independent, except Ms. Schertell.

More information may be found in the section entitled “The Merger —Governance of the Combined Company” beginning on page 117.

 

Q:

When and where will each of the special meetings take place?

 

A:

The SWM special meeting will be held virtually via live webcast on the Internet at www.cesonlineservices.com/swm22_vm, on June 29, 2022, at 8:00 a.m. Eastern Time.

The Neenah special meeting will be held virtually via live webcast on the Internet at www.virtualshareholdermeeting.com/NP2022SM, on June 29, 2022, at 9:00 a.m. Eastern Time.

Even if you plan to virtually attend your respective company’s special meeting, SWM and Neenah recommend that you vote your shares in advance (as described under “How can I vote my shares without attending my respective special meeting?” below) so that your vote will be counted if you later decide not to or become unable to attend the applicable special meeting. Shares held in “street name” through a bank, broker or other nominee may be voted in person (via the Internet) by you only if you obtain a signed legal proxy from your broker, bank or other nominee giving you the right to vote the shares.

 

Q:

What matters will be considered at each of the special meetings?

 

A:

At the SWM special meeting, SWM stockholders will be asked to consider and vote on the following proposals:

 

   

SWM Proposal 1: The SWM share issuance proposal. Approval of the issuance of shares of SWM common stock, pursuant to the terms of the merger agreement, in an amount necessary to complete the merger and the other transactions contemplated by the merger agreement.

 

   

SWM Proposal 2: The SWM adjournment proposal. Approval of the adjournment of the SWM special meeting from time to time, if determined by the chairperson of the meeting to be necessary or

 

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appropriate, including adjournment to permit further solicitation of proxies in favor of the SWM share issuance proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to SWM stockholders.

At the Neenah special meeting, Neenah stockholders will be asked to consider and vote on the following proposals:

 

   

Neenah Proposal 1: The Neenah merger proposal. Approval and adoption of the merger agreement and the transactions contemplated thereby, including the merger.

 

   

Neenah Proposal 2: The Neenah compensation proposal. Approval of, on an advisory (non-binding) basis, the compensation that may be paid or become payable to Neenah’s named executive officers that is based on or otherwise relates to the merger.

 

   

Neenah Proposal 3: The Neenah adjournment proposal. Approval of the adjournment of the Neenah special meeting from time to time, if determined by the chairperson of the meeting to be necessary or appropriate, including adjournments to permit further solicitation of proxies in favor of the Neenah merger proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to Neenah stockholders.

To complete the merger, among other things, SWM stockholders must approve the SWM share issuance proposal, and Neenah stockholders must approve the Neenah merger proposal. None of the approvals of the SWM adjournment proposal, the Neenah compensation proposal or the Neenah adjournment proposal are conditions to the obligations of SWM or Neenah to complete the merger, and the merger may be completed even if approval of one or more of those proposals is not obtained.

 

Q:

What will Neenah stockholders receive in the merger?

 

A:

In the merger, Neenah stockholders will be entitled to receive 1.358 shares of SWM common stock for each share of Neenah common stock held immediately prior to the completion of the merger. SWM will not issue any fractional shares of SWM common stock in the merger. Neenah stockholders who would otherwise be entitled to a fractional share of SWM common stock in the merger will instead receive an amount in cash (rounded to the nearest cent) determined by multiplying the average closing-sale prices of shares of SWM common stock on the NYSE as reported by the Wall Street Journal for the consecutive period of five (5) trading days ending on the day immediately preceding the day on which the merger is completed (which we refer to as the “SWM closing share value”) by the fraction of a share (rounded to the nearest thousandth when expressed in decimal form) of SWM common stock that such stockholder would otherwise be entitled to receive.

 

Q:

What will SWM stockholders receive in the merger?

 

A:

In the merger, SWM stockholders will not receive any consideration, and their shares of SWM common stock will remain outstanding and will constitute shares of the combined company. Following the merger, shares of SWM common stock will continue to be listed on the NYSE. SWM will change the name and the NYSE ticker symbol of the combined company to such new name and ticker symbol as mutually agreed upon by SWM and Neenah, which change may occur as of or after the effective time.

 

Q:

Do SWM and Neenah directors and executive officers have interests that may differ from those of other SWM and Neenah stockholders?

 

A:

Yes. In considering the recommendation of the SWM board of directors that SWM stockholders vote to approve the SWM share issuance proposal and the SWM adjournment proposal and the recommendation of the Neenah board of directors that the Neenah stockholders vote to approve the Neenah merger proposal, the Neenah compensation proposal and the Neenah adjournment proposal, SWM and Neenah stockholders

 

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  should be aware and take into account the fact that certain SWM and Neenah directors and executive officers have interests in the merger that may be different from, or in addition to, the interests of SWM and Neenah stockholders generally. The SWM and Neenah boards of directors were aware of and carefully considered these interests, among other matters, in evaluating the terms and structure and overseeing the negotiation of the merger, in approving the merger agreement and the transactions contemplated thereby, including the merger, and in recommending that the SWM stockholders and Neenah stockholders adopt such proposals, respectively.

See “The Merger—Interests of Certain SWM Directors and Executive Officers in the Merger,” “The Merger—Interests of Certain Neenah Directors and Executive Officers in the Merger” and “The Merger—Governance of the Combined Company” beginning on pages 107, 111 and 117, respectively.

 

Q:

Will the value of the merger consideration change between the date of this joint proxy statement/prospectus and the time the merger is completed?

 

A:

Yes. Although the number of shares of SWM common stock that Neenah stockholders will receive is fixed, the value of the merger consideration will fluctuate between the date of this joint proxy statement/prospectus and the completion of the merger based on the market value of SWM common stock. Based on the closing price of SWM common stock on the NYSE on March 25, 2022, of $30.23, the last trading day before public announcement of the merger, the exchange ratio represented approximately $41.05 in value for each share of Neenah common stock. Based on the closing price of SWM’s common stock on the NYSE on May 20, 2022, of $26.31, the exchange ratio represented approximately $35.73 in value for each share of Neenah common stock. Any fluctuation in the market price of SWM common stock after the date of this joint proxy statement/prospectus will change the value of the shares of SWM common stock that Neenah stockholders will receive in the merger. We urge you to obtain current market quotations of SWM common stock (trading symbol “SWM”) and Neenah common stock (trading symbol “NP”).

 

Q:

How will the merger affect Neenah stock options?

 

A:

At the effective time, each outstanding and unexercised Neenah stock option will automatically be converted into an SWM stock option to purchase a number of shares of SWM common stock (rounded down to the nearest whole share) equal to the product of (i) the number of shares of Neenah common stock subject to the Neenah stock option immediately prior to the effective time and (ii) the exchange ratio, at an exercise price per share of SWM common stock (rounded up to the nearest whole cent) equal to the quotient of (a) the exercise price per share of Neenah common stock of such Neenah stock option immediately prior to the effective time and (b) the exchange ratio; provided, however, that the exercise price and the number of shares of SWM common stock will be determined in a manner consistent with the requirements of Section 409A of the U.S. Internal Revenue Code of 1986, as amended (which we refer to as the “Code”). Each such SWM stock option will be subject to the same terms and conditions (including without limitation, the accelerated vesting and extended exercise term that applies in connection with a termination of employment by the employer without “Cause” (as defined in the applicable Neenah stock option agreement) or resignation for “Good Reason” (as defined in the applicable Neenah stock option agreement), in either event within two (2) years following the “Change in Control” (as defined in the applicable Neenah stock option agreement)) as applied to the corresponding Neenah stock option immediately prior to the effective time.

See “The Merger Agreement—Treatment of Neenah Equity Awards” beginning on page 129.

 

Q:

How will the merger affect Neenah stock appreciation rights?

 

A:

At the effective time, each outstanding and unexercised Neenah stock appreciation right will automatically be converted into a right to receive a stock appreciation right with respect to that number of shares of SWM common stock (rounded down to the nearest whole share) equal to the product of (i) the number of shares

 

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  of Neenah common stock subject to the Neenah stock appreciation right immediately prior to the effective time and (ii) the exchange ratio, at an exercise price per share of SWM common stock (rounded up to the nearest whole cent) equal to the quotient of (a) the exercise price per share of Neenah common stock of such Neenah stock appreciation right immediately prior to the effective time and (b) the exchange ratio; provided, however, that the exercise price and the number of shares of SWM common stock will be determined in a manner consistent with the requirements of Section 409A of the Code. Each such SWM stock appreciation right will be subject to the same terms and conditions (including without limitation, the accelerated vesting and extended exercise term that applies in connection with a termination of employment by the employer without “Cause” (as defined in the applicable Neenah stock appreciation right agreement) or resignation for “Good Reason” (as defined in the applicable Neenah stock appreciation right agreement), in either event within two (2) years following the “Change in Control” (as defined in the applicable Neenah stock appreciation right agreement)) as applied to the corresponding Neenah stock appreciation right immediately prior to the effective time.

See “The Merger Agreement—Treatment of Neenah Equity Awards” beginning on page 129.

 

Q:

How will the merger affect Neenah restricted stock unit awards?

 

A:

At the effective time, each outstanding Neenah restricted stock unit award (excluding performance share awards) will automatically be converted into an SWM restricted stock unit award in respect of that number of shares of SWM common stock (rounded down to the nearest whole share) equal to the product of (i) the number of shares of Neenah common stock subject to the Neenah restricted stock unit award immediately prior to the effective time and (ii) the exchange ratio. Each such SWM restricted stock unit award will be subject to the same terms and conditions (including without limitation, the accelerated vesting and payment terms that apply in connection with a termination of employment by the employer without “Cause” (as defined in the applicable Neenah restricted stock unit award agreement) or resignation for “Good Reason” (as defined in the applicable Neenah restricted stock unit award agreement), in either event within two (2) years following the “Change in Control” (as defined in the applicable Neenah restricted stock unit award agreement)) as applied to the corresponding Neenah restricted stock unit award immediately prior to the effective time.

See “The Merger Agreement—Treatment of Neenah Equity Awards” beginning on page 129.

 

Q:

How will the merger affect Neenah performance share awards?

 

A:

At the effective time, each outstanding Neenah restricted stock unit award that is subject to performance goal conditions (which we refer to as the “Neenah performance share awards”) will automatically be converted into an SWM restricted stock unit award in respect of that number of shares of SWM common stock (rounded down to the nearest whole share) equal to the product of (i) the number of shares of Neenah common stock subject to such Neenah performance share award immediately prior to the effective time and (ii) the exchange ratio. The number of shares of Neenah common stock subject to a Neenah performance share award with a performance period that is incomplete (or that is complete but for which performance is not determinable due to the unavailability of the required data for relative measures) as of the effective time will be the target number of shares subject to such Neenah performance share award (as set forth in the applicable Neenah performance share award). After the effective time, each such SWM restricted stock unit award will be scheduled to cliff vest, subject to the holder’s continued service with the combined company or its subsidiaries, on the last day of the originally scheduled performance period, but subject to earlier payment and vesting in accordance with the applicable Neenah performance share award agreement if the holder’s termination of employment by the employer without “Cause” (as defined in the Neenah Executive Severance Plan) or resignation for “Good Reason” (as defined in the Neenah Executive Severance Plan) occurs, in either event within two (2) years following the “Change in Control” (as defined in the applicable Neenah performance share award agreement), and subject, in the case of death, “Retirement” (as defined in the applicable Neenah performance share award agreement) or “Disability” (as defined in the applicable

 

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  Neenah performance share award agreement), to vesting as provided in the applicable Neenah performance share award agreement and payment within thirty (30) days after the later of the vesting event or the effective time. Except as otherwise provided in this Q/A, each such SWM restricted stock unit award will be subject to the same terms and conditions as applied to the corresponding Neenah performance share award immediately prior to the effective time.

See “The Merger Agreement—Treatment of Neenah Equity Awards” beginning on page 129.

 

Q:

How will the merger affect SWM equity awards?

 

A:

Each SWM stock option, SWM restricted stock award, SWM restricted stock unit award and SWM performance share unit award (which we refer to collectively as the “SWM equity awards”) will not be impacted by the merger and will continue to be an award in respect of SWM common stock following the effective time, subject to the same terms and conditions that were applicable to such award before the effective time. However, pursuant to the terms of the merger agreement, prior to closing of the merger, SWM may, but is not required to, convert all outstanding SWM performance share unit awards, at the determination of the SWM compensation committee, into SWM restricted stock unit awards as of the effective time. The number of shares of SWM common stock subject to the SWM restricted stock unit award will be the “target” number of shares subject to the SWM performance share unit award for the applicable performance period under the SWM performance share unit award agreement, but otherwise the SWM restricted stock unit award will be subject to the same material terms and conditions as the SWM performance share unit award that it replaces.

 

Q:

How will the merger affect dividends?

 

A:

The merger agreement permits SWM and Neenah to continue to pay their respective stockholders regular quarterly cash dividends at a rate consistent with the prior quarter’s cash dividend through the consummation of the merger. After the effective time, dividends will be determined by the board of directors of the combined company.

 

Q:

How does the SWM board of directors recommend that I vote at the SWM special meeting?

 

A:

The SWM board of directors recommends that you vote “FOR” the SWM share issuance proposal and “FOR” the SWM adjournment proposal.

In considering the recommendations of the SWM board of directors, SWM stockholders should be aware that SWM directors and executive officers may have interests in the merger that are different from, or in addition to, the interests of SWM stockholders generally. For a more complete description of these interests, see “The Merger—Interests of SWM’s Directors and Executive Officers in the Merger” beginning on page 107.

 

Q:

How does the Neenah board of directors recommend that I vote at the Neenah special meeting?

 

A:

The Neenah board of directors recommends that you vote “FOR” the Neenah merger proposal, “FOR” the Neenah compensation proposal and “FOR” the Neenah adjournment proposal.

In considering the recommendations of the Neenah board of directors, Neenah stockholders should be aware that Neenah directors and executive officers may have interests in the merger that are different from, or in addition to, the interests of Neenah stockholders generally. For a more complete description of these interests, see “The Merger—Interests of Neenah’s Directors and Executive Officers in the Merger” beginning on page 111.

 

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Q:

Who is entitled to vote at the SWM special meeting?

 

A:

The record date for the SWM special meeting is May 20, 2022. All SWM stockholders who hold shares at the close of business on the record date for the SWM special meeting are entitled to receive notice of, and to vote at, the SWM special meeting.

Each SWM stockholder is entitled to cast one (1) vote on each matter properly brought before the SWM special meeting for each share of SWM common stock that such holder owned of record as of the record date. As of the close of business on the record date for the SWM special meeting, there were                 outstanding shares of SWM common stock. See below and “The SWM Special Meeting—Voting of Proxies” beginning on page 49 for instructions on how to vote your shares without attending the SWM special meeting.

 

Q:

Who is entitled to vote at the Neenah special meeting?

 

A:

The record date for the Neenah special meeting is May 20, 2022. All Neenah stockholders who hold shares at the close of business on the record date for the Neenah special meeting are entitled to receive notice of, and to vote at, the Neenah special meeting.

Each Neenah stockholder is entitled to cast one (1) vote on each matter properly brought before the Neenah special meeting for each share of Neenah common stock that such holder owned of record as of the record date. As of the close of business on the record date for the Neenah special meeting, there were                  outstanding shares of Neenah common stock. See below and “The Neenah Special Meeting—Voting of Proxies” beginning on page 56 for instructions on how to vote your shares without attending the Neenah special meeting.

 

Q:

What constitutes a quorum for the SWM special meeting?

 

A:

Holders of a majority of the voting power of the SWM common stock issued and outstanding and entitled to vote, present in person (via the Internet) or represented by proxy, will be necessary to constitute a quorum for the transaction of business at the SWM special meeting. If you fail to submit a proxy or to vote in person (via the Internet) at the SWM special meeting, your shares of SWM common stock will not be counted towards a quorum. Abstentions (meaning votes to abstain or a stockholder attending the meeting in person (via the Internet) but not voting) are considered present for purposes of establishing a quorum. Broker non-votes, which occur when a stockholder’s broker or nominee does not have voting instructions or discretionary authority to vote on a particular matter, but does have authority to vote on another matter, if any, would under the standard be counted for the purpose of determining the presence of a quorum for the transaction of business at the SWM special meeting. Because it is expected that all proposals to be voted on at the SWM special meeting will be “non-routine” matters for which a broker or nominee does not have discretionary authority, it is unlikely that there will be any broker non-votes at the SWM special meeting.

 

Q:

What constitutes a quorum for the Neenah special meeting?

 

A:

Holders of a majority of the voting power of the Neenah common stock issued and outstanding and entitled to vote, present in person (via the Internet) or represented by proxy, will be necessary to constitute a quorum for the transaction of business at the Neenah special meeting. If you fail to submit a proxy or to vote in person (via the Internet) at the Neenah special meeting, your shares of Neenah common stock will not be counted towards a quorum. Abstentions are considered present for purposes of establishing a quorum. Broker non-votes, if any, would under this standard be counted for the purpose of determining the presence of a quorum for the transaction of business at the Neenah special meeting. Because it is expected that all proposals to be voted on at the Neenah special meeting will be “non-routine” matters for which a broker or nominee does not have discretionary authority, it is unlikely that there will be any broker non-votes at the Neenah special meeting.

 

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Q:

What vote is required for the approval of each proposal at the SWM special meeting?

 

A:

SWM Proposal 1: SWM share issuance proposal. Approval of the SWM share issuance proposal requires the affirmative vote of a majority of the shares of SWM common stock which are present in person (via the Internet) or by proxy at the SWM special meeting and entitled to vote on the SWM share issuance proposal. If you attend the SWM special meeting in person (via the Internet) and do not vote, or if you submit a proxy card on which you indicate that you abstain from voting, this will have the effect of a vote “AGAINST” the SWM share issuance proposal.

If you are an SWM stockholder entitled to vote at the SWM special meeting and you do not attend the SWM special meeting in person (via the Internet), return a proxy, or provide voting instructions to your brokerage firm, your shares will not be voted and will not be treated as present for purposes of establishing a quorum, and assuming a quorum is present, this failure to vote will have no effect on the SWM share issuance proposal.

SWM Proposal 2: SWM adjournment proposal. Approval of the SWM adjournment proposal requires the affirmative vote of a majority of the shares of SWM common stock present in person (via the Internet) or represented by proxy at the SWM special meeting and entitled to vote thereon. If you attend the SWM special meeting in person (via the Internet) and do not vote, or if you submit a proxy card on which you indicate that you abstain from voting, this will have the effect of a vote “AGAINST” the SWM adjournment proposal.

If you are an SWM stockholder entitled to vote at the SWM special meeting and you do not attend the SWM special meeting in person (via the Internet) return a proxy, or provide voting instructions to your brokerage firm, your shares will not be voted and will not be treated as present for purposes of establishing a quorum, and assuming a quorum is present, this failure to vote will have no effect on the SWM adjournment proposal.

Because it is expected that all proposals to be voted on at the SWM special meeting will be “non-routine” matters, it is unlikely that there will be any broker non-votes at the SWM special meeting.

 

Q:

What vote is required for the approval of each proposal at the Neenah special meeting?

 

A:

Neenah Proposal 1: Neenah merger proposal. Approval of the Neenah merger proposal requires the affirmative vote of the holders of two-thirds of the outstanding shares of Neenah common stock entitled to vote on the Neenah merger proposal. If you attend the Neenah special meeting in person (via the Internet) and do not vote, or if you submit a proxy card on which you indicate that you abstain from voting, this will have the effect of a vote “AGAINST” the Neenah merger proposal.

If you are a Neenah stockholder entitled to vote at the Neenah special meeting and you do not attend the Neenah special meeting in person (via the Internet), return a proxy, or provide voting instructions to your brokerage firm, your shares will not be voted and will not be treated as present for purposes of establishing a quorum, and this failure to vote will have the effect of a vote “AGAINST” the Neenah merger proposal.

Neenah Proposal 2: Neenah compensation proposal. Approval of the Neenah compensation proposal requires the affirmative vote of the holders of a majority in voting power of the shares of Neenah common stock which are present in person (via the Internet) or represented by proxy at the Neenah special meeting and entitled to vote on the Neenah compensation proposal; however, such vote is non-binding and advisory only. If you attend the Neenah special meeting in person (via the Internet) and do not vote, or if you submit a proxy card on which you indicate that you abstain from voting, this will have the effect of a vote “AGAINST” the Neenah compensation proposal.

If you are a Neenah stockholder entitled to vote at the Neenah special meeting and you do not attend the Neenah special meeting in person (via the Internet), return a proxy or provide voting instructions to your brokerage firm, your shares will not be voted and will not be treated as present for purposes of establishing a quorum, and this failure to vote will have no effect on the Neenah compensation proposal.

 

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Neenah Proposal 3: Neenah adjournment proposal. Approval of the Neenah adjournment proposal requires the affirmative vote of the holders of a majority in voting power of the shares of Neenah common stock which are present in person (via the Internet) or represented by proxy at the Neenah special meeting and entitled to vote on the Neenah adjournment proposal. If you attend the Neenah special meeting in person (via the Internet) and do not vote, or if you submit a proxy card on which you indicate that you abstain from voting, this will have the effect of a vote “AGAINST” the Neenah adjournment proposal.

If you are a Neenah stockholder entitled to vote at the Neenah special meeting and you do not attend the Neenah special meeting in person (via the Internet), return a proxy or provide voting instructions to your brokerage firm, your shares will not be voted and will not be treated as present for purposes of establishing a quorum, and assuming a quorum is present, this will have no effect on the Neenah adjournment proposal.

Because it is expected that all proposals to be voted on at the Neenah special meeting will be “non-routine” matters, it is unlikely that there will be any broker non-votes at the Neenah special meeting.

 

Q:

Why are Neenah stockholders being asked to consider and vote on a proposal to approve, by non-binding, advisory vote, the merger-related compensation arrangements for the Neenah named executive officers (i.e., the Neenah compensation proposal)?

 

A:

Under SEC rules, Neenah is required to seek a non-binding, advisory vote with respect to the compensation that may be paid or become payable to Neenah’s named executive officers that is based on or otherwise relates to the merger, or “golden parachute” compensation.

 

Q:

What happens if the Neenah stockholders do not approve the Neenah compensation proposal?

 

A:

The Neenah compensation proposal is separate and apart from the votes to approve the other proposals being presented at the Neenah special meeting. Because the vote on the Neenah compensation proposal is advisory in nature only, it will not be binding upon Neenah, or the combined company. Accordingly, the merger-related compensation will be paid to Neenah’s named executive officers to the extent payable in accordance with the terms of their compensation agreements and arrangements even if the Neenah stockholders do not approve the Neenah compensation proposal.

 

Q:

How do I vote my shares if I hold both SWM common stock and Neenah common stock?

 

A:

If you hold shares of both SWM common stock and Neenah common stock, you will receive two (2) separate packages of proxy materials. A vote cast as an SWM stockholder will not count as a vote cast as a Neenah stockholder, and a vote cast as a Neenah stockholder will not count as a vote cast as an SWM stockholder. Therefore, please submit separate proxies for your shares of SWM common stock and your shares of Neenah common stock, or otherwise attend each respective special meeting and vote in person (via the Internet). Additional information on attending the special meetings can be found under the section entitled “The SWM Special Meeting” on page 48 and under the section entitled “The Neenah Special Meeting” on page 54.

 

Q:

How can I vote my shares in person (via the Internet) at my respective special meeting?

 

A:

Record holders. Shares held directly in your name as the holder of record of SWM or Neenah may be voted in person (via the Internet) at the SWM special meeting or the Neenah special meeting, as applicable. To enter the SWM special meeting and vote your shares in person (via the Internet) visit www.cesonlineservices.com/swm22_vm, and use the control number that is printed on your proxy card. In order to attend the virtual meeting, you will need to pre-register by 8:00 a.m. Eastern Time on June 28, 2022 on such website. To enter the Neenah special meeting and vote your shares in person (via the Internet) visit www.virtualshareholdermeeting.com/NP2022SM, and use the 16-digit control number that is printed in the box on your proxy card.

Shares in “street name.” Shares held in “street name” through a bank, broker or other nominee may be voted in person (via the Internet) by you only if you obtain a signed legal proxy from your broker, bank or

 

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other nominee giving you the right to vote the shares. If you choose to vote your shares in person (via the Internet) at the SWM special meeting or the Neenah special meeting, as applicable, please follow the voting instructions provided by your broker, bank or other nominee.

Even if you plan to attend the SWM special meeting or the Neenah special meeting in person (via the Internet), as applicable, SWM and Neenah recommend that you vote your shares in advance as described below so that your vote will be counted if you later decide not to or become unable to attend the respective special meeting.

Additional information on attending the special meetings can be found under the section entitled “The SWM Special Meeting” on page 48 and under the section entitled “The Neenah Special Meeting” on page 54.

 

Q:

How can I vote my shares without attending my respective special meeting?

 

A:

Whether you hold your shares directly as the holder of record of SWM or Neenah or beneficially in “street name,” you may direct your vote by proxy without attending the SWM special meeting or the Neenah special meeting, as applicable. If you are a holder of record, you can vote by proxy over the Internet, by telephone or by mail by following the instructions provided in the enclosed proxy card. Please note that if you hold shares beneficially in “street name,” you should follow the voting instructions provided by your broker, bank or other nominee.

Additional information on voting procedures can be found under the section entitled “The SWM Special Meeting” on page 48 and under the section entitled “The Neenah Special Meeting” on page 54.

 

Q:

What do I need to do now to vote my shares?

 

A:

After carefully reading and considering the information contained in this joint proxy statement/prospectus, please respond by completing, signing and dating the accompanying proxy card and returning it in the enclosed postage-paid envelope, or by submitting your proxy by telephone or through the Internet, as soon as possible so that your shares may be represented at your special meeting. Please note that if you hold shares beneficially in “street name,” you should follow the voting instructions provided by your broker, bank or other nominee.

 

Q:

If my shares are held in “street name” by a broker, bank or other nominee, will my broker, bank or other nominee vote my shares for me?

 

A:

No. Your broker, bank or other nominee cannot vote your shares without instructions from you. You should instruct your broker, bank or other nominee how to vote your shares in accordance with the instructions provided to you. Please check the voting instructions provided by your broker, bank or other nominee.

 

Q:

Why is my vote important?

 

A:

If you do not vote, it will be more difficult for SWM or Neenah to obtain the necessary quorum to hold its respective special meeting. The merger cannot be completed without the approval of the SWM share issuance proposal by the SWM stockholders and the approval of the Neenah merger proposal by the Neenah stockholders. It is particularly important for Neenah stockholders to vote because approval of the Neenah merger proposal requires the affirmative vote of the holders of two-thirds of the outstanding shares of Neenah common stock entitled to vote thereon. Shares of Neenah common stock that are not voted on the Neenah merger proposal will have the same effect as shares voted “AGAINST” the Neenah merger proposal. The SWM board of directors and the Neenah board of directors recommend that you vote “FOR” each of the proposals submitted at the SWM special meeting and the Neenah special meeting, respectively.

 

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Q:

Can I change my vote after I have delivered my proxy or voting instruction card?

 

A:

Yes. You can change your vote at any time before your proxy is voted at your meeting. You can do this by:

 

   

submitting another properly completed proxy over the Internet, by telephone or by mail with a later date;

 

   

delivering a written revocation letter to the Secretary of SWM or Neenah, as applicable; or

 

   

attending the applicable special meeting in person (via the Internet) and voting by online ballot at such special meeting.

If your shares are held by a broker, bank or other nominee, you should contact your broker, bank or other nominee to change your vote.

 

Q:

Will SWM be required to submit the SWM share issuance proposal to its stockholders even if the SWM board of directors has withdrawn, modified or qualified its recommendation?

 

A:

Yes. Unless the merger agreement is terminated before the SWM special meeting, SWM is required to submit the SWM share issuance proposal to its stockholders even if the SWM board of directors has withdrawn or modified its recommendation.

 

Q:

Will Neenah be required to submit the Neenah merger proposal to its stockholders even if the Neenah board of directors has withdrawn, modified or qualified its recommendation?

 

A:

Yes. Unless the merger agreement is terminated before the Neenah special meeting, Neenah is required to submit the Neenah merger proposal to its stockholders even if the Neenah board of directors has withdrawn or modified its recommendation.

 

Q:

Are SWM stockholders entitled to appraisal rights?

 

A:

No. SWM stockholders are not entitled to appraisal rights under the General Corporation Law of the State of Delaware, as amended (which we refer to as the “DGCL”). For more information, see “The Merger—Appraisal Rights” beginning on page 127.

 

Q:

Are Neenah stockholders entitled to appraisal rights?

 

A:

No. Neenah stockholders are not entitled to appraisal rights under the DGCL. For more information, see “The Merger—Appraisal Rights” beginning on page 127.

 

Q:

Are there any risks that I should consider in deciding whether to vote?

 

A:

Yes. You should read and carefully consider the risk factors set forth in the section entitled “Risk Factors” beginning on page 38. You also should read and carefully consider the risk factors of SWM and Neenah contained in the documents that are incorporated by reference into this joint proxy statement/prospectus. Please also see “Where You Can Find More Information” beginning on page 188.

 

Q:

What are the material U.S. federal income tax consequences of the merger to Neenah stockholders?

 

A:

The merger has been structured to qualify as a “reorganization” within the meaning of Section 368(a) of the Code. Accordingly, Neenah stockholders generally will not recognize any gain or loss for federal income tax purposes on the exchange of their Neenah common stock for SWM common stock in the merger, except for any gain or loss that may result from the receipt of cash instead of a fractional share of SWM common stock. You should be aware that the tax consequences to you of the merger may depend upon your own

 

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  situation. In addition, you may be subject to other U.S. federal, state, local or foreign tax laws that are not discussed in this joint proxy statement/prospectus. You should therefore consult with your own tax advisors for a full understanding of all possible tax consequences to you of the merger. For a more complete discussion of the material U.S. federal income tax consequences of the merger, see “The Merger—Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 123.

 

Q:

When is the merger expected to be completed?

 

A:

SWM and Neenah expect the merger to close in the second half of 2022. However, neither SWM nor Neenah can predict the actual date on which the merger will be completed, or if the merger will be completed at all, because completion is subject to conditions and factors outside the control of both companies. SWM and Neenah must first obtain the required approvals of SWM stockholders and Neenah stockholders, as well as obtain necessary regulatory approvals and satisfy certain other closing conditions. For more information, see “The Merger Agreement—Conditions to Complete the Merger” beginning on page 147.

 

Q:

What happens if the merger is not completed?

 

A:

If the merger is not completed, Neenah stockholders will not receive any consideration for their shares of Neenah common stock in connection with the merger. Instead, Neenah and SWM will remain independent, stand-alone public companies, Neenah common stock will continue to be traded on the NYSE, and SWM will not complete the issuance of shares of SWM common stock pursuant to the merger agreement. In addition, if the merger agreement is terminated in certain circumstances, a termination fee of $24 million will be payable by either SWM or Neenah, as applicable. See “The Merger Agreement—Termination Fee” beginning on page 150 for a more detailed discussion of the circumstances under which a termination fee will be required to be paid.

 

Q:

Should I send in my stock certificates now?

 

A:

No. Please do not send in your stock certificates with your proxy. After the merger is completed, an exchange agent designated by SWM and reasonably acceptable to Neenah (which we refer to as the “exchange agent”) will send you instructions for exchanging Neenah stock certificates for the consideration to be received in the merger. See “The Merger Agreement—Exchange of Shares; Exchange of Neenah Stock Certificates” beginning on page 131.

 

Q:

What should I do if I receive more than one set of voting materials for the same special meeting?

 

A:

If you hold shares of SWM common stock or Neenah common stock in “street name” and also directly in your name as a holder of record or otherwise or if you hold shares of SWM common stock or Neenah common stock in more than one (1) brokerage account, you may receive more than one (1) set of voting materials relating to the same special meeting.

Record holders. For shares held directly, please complete, sign, date and return each proxy card by mail (or cast your vote by telephone or Internet as provided on each proxy card) or otherwise follow the voting instructions provided in this joint proxy statement/prospectus to ensure that all of your shares of SWM common stock or Neenah common stock are voted.

Shares in “street name.” For shares held in “street name” through a broker, bank or other nominee, you should follow the procedures provided by your broker, bank or other nominee to vote your shares.

 

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Q:

Who can help answer my questions?

 

A:

If you have any questions about the merger or how to submit your proxy or voting instruction card, or if you need additional copies of this joint proxy statement/prospectus or the enclosed proxy card or voting instruction card, please direct your inquiry as follows:

 

SWM stockholders:    Neenah stockholders:

MacKenzie Partners, Inc.

1407 Broadway, 27th Floor

New York, New York 10018

  

Okapi Partners LLC

1212 Avenue of the Americas, 24th Floor

New York, NY 10036

Call Toll-Free: 1-800-322-2885

Email: [email protected]

  

Call Toll-Free: 877-259-6290

Banks and Brokerage Firms Call: (212) 297-0720

Email: [email protected]

 

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SUMMARY

This summary highlights selected information in this joint proxy statement/prospectus and may not contain all of the information that is important to you. You should carefully read this entire joint proxy statement/prospectus, including the annexes, and the other documents we refer you to for a more complete understanding of the matters being considered at the special meetings. In addition, we incorporate by reference important business and financial information about SWM and Neenah into this joint proxy statement/prospectus. You may obtain the information incorporated by reference into this joint proxy statement/prospectus without charge by following the instructions in the section entitled “Where You Can Find More Information” beginning on page 188 of this joint proxy statement/prospectus.

The Parties to the Merger (page 46)

SWM

Schweitzer-Mauduit International, Inc.

100 North Point Center East, Suite 600

Alpharetta, Georgia 30022

1-800-514-0186

Schweitzer-Mauduit International, Inc. is a Delaware corporation headquartered in Alpharetta, Georgia.

SWM is a leading global performance materials company, focused on finding ways to improve everyday life by bringing best-in-class innovation, design and manufacturing solutions to its customers. SWM’s highly engineered films, adhesive tapes, foams, nets, nonwovens and papers are designed and manufactured using resins, polymers and natural fibers for a variety of industries and specialty applications. SWM and its subsidiaries manufacture on four continents, conduct business in over 90 countries and employ approximately 5,000 people worldwide.

SWM common stock is traded on the NYSE under the symbol “SWM.”

Neenah

Neenah, Inc.

3460 Preston Ridge Road, Suite 600

Alpharetta, Georgia 30005

(678) 566-6500

Neenah, Inc. is a Delaware corporation headquartered in Alpharetta, Georgia.

Neenah is a leading global manufacturer of specialty materials, focused on growing in filtration media, specialty coatings, engineered materials and imaging and packaging. Neenah’s materials are in various products used every day, such as transportation and water filters, premium packaging of spirits, technology and beauty products, industrial labels, tapes and abrasives, and digital printing for high-end apparel. Neenah and its subsidiaries manufacture in North America and Europe, conduct business in over 90 countries and employ approximately 2,500 people worldwide.

Neenah common stock is traded on the NYSE under the symbol “NP.”

The Merger and the Merger Agreement (pages 61 and 128)

The terms and conditions of the merger are contained in the merger agreement, a copy of which is attached as Annex A to this joint proxy statement/prospectus. You are encouraged to read the merger agreement carefully and in its entirety, as it is the primary legal document that governs the merger.

 

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Subject to the terms and conditions of the merger agreement, at the effective time, Merger Sub will merge with and into Neenah, with Neenah as the surviving corporation and a wholly-owned subsidiary of SWM. Upon completion of the merger, Neenah common stock will be delisted from the NYSE and deregistered under the Exchange Act and will cease to be publicly traded.

Exchange Ratio

In the merger, Neenah stockholders will receive 1.358 shares of SWM common stock for each share of Neenah common stock they hold immediately prior to the effective time. SWM will not issue any fractional shares of SWM common stock in the merger. Holders of Neenah common stock who would otherwise be entitled to a fraction of a share of SWM common stock in the merger will instead receive, for the fraction of a share, an amount in cash (rounded to the nearest cent) based on the SWM closing share value.

SWM common stock is listed on the NYSE under the symbol “SWM,” and Neenah common stock is listed on the NYSE under the symbol “NP.” The following table shows the closing sale prices of SWM common stock and Neenah common stock as reported on the NYSE on March 25, 2022, the last trading day before the public announcement of the merger and on May 20, 2022, the last practicable trading day before the date of this joint proxy statement/prospectus. This table also shows the implied value of the merger consideration to be issued in exchange for each share of Neenah common stock, which was calculated by multiplying the closing price of SWM common stock on those dates by the exchange ratio of 1.358.

 

     SWM
Common
Stock
     Neenah
Common
Stock
     Implied Value
of One Share
of Neenah
Common
Stock
 

March 25, 2022

   $ 30.23      $ 38.21      $ 41.05  

May 20, 2022

   $ 26.31      $ 36.31      $ 35.73  

The market prices of shares of SWM common stock and Neenah common stock have fluctuated since the date of the announcement of the merger and will continue to fluctuate from the date of this joint proxy statement/prospectus to the date the merger is completed, and the market price of shares of SWM common stock will continue to fluctuate after the completion of the merger. No assurance can be given concerning the market prices of SWM common stock or Neenah common stock before the completion of the merger or SWM common stock after the completion of the merger. Because the merger consideration is payable in a fixed number of shares of SWM common stock, the market price of SWM common stock (and therefore the value of the merger consideration) when received by Neenah stockholders after the completion of the merger could be greater than, less than or the same as shown in the table above. Accordingly, stockholders are advised to obtain current market quotations for SWM common stock and Neenah common stock when considering how to vote on the Neenah merger proposal.

For more information on the exchange ratio, see the section entitled “The Merger—Terms of the Merger” beginning on page 61 and “The Merger Agreement—Merger Consideration” beginning on page 128.

Treatment of Neenah Equity Awards (page 129)

At the effective time, each outstanding Neenah equity award granted under Neenah’s equity compensation plans (other than certain performance share awards described below) will be converted into a corresponding award with respect to SWM common stock, with the number of SWM shares underlying such award (and, in the case of stock options and stock appreciation rights, the applicable exercise price) adjusted based on the exchange ratio and rounded down to the nearest whole SWM share (and, in the case of stock options and stock appreciation rights, with the exercise price per share rounded up to the nearest whole cent). After the effective time, each such converted Neenah equity award will continue to be subject to the same terms and conditions (including vesting

 

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and exercisability or payment terms) as applied to the corresponding Neenah equity award, which includes provisions for accelerated vesting and accelerated payment or extended exercise in connection with a qualifying termination of employment within two years following a “Change in Control” (as defined in the equity award agreements). The merger will be a “Change in Control” for purposes of the equity award agreements.

In the case of Neenah performance share awards with a performance period that is incomplete or for which performance is not determinable as of the effective time, the number of Neenah shares underlying such awards will be deemed to be the target number of shares subject to such Neenah performance share award (as set forth in the applicable Neenah performance share award agreement). Such Neenah performance share awards will be converted into SWM restricted stock unit awards at the effective time and, after the effective time, such awards will cliff vest, subject to the holder’s continued service, on the last day of the originally scheduled performance period, but subject to earlier payment and vesting in accordance with the applicable Neenah performance share award agreement.

Material U.S. Federal Income Tax Consequences (page 123)

The merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and it is a condition to the respective obligations of SWM and Neenah to complete the merger that each of SWM and Neenah receive a legal opinion to that effect. Accordingly, Neenah stockholders are not expected to recognize any gain or loss for U.S. federal income tax purposes on the exchange of their Neenah common stock for SWM common stock in the merger, except with respect to any cash received instead of a fractional share of SWM common stock. You should be aware that the tax consequences to you of the merger may depend upon your own situation. In addition, you may be subject to other U.S. federal, state, local or foreign tax laws that are not discussed in this joint proxy statement/prospectus. You should therefore consult with your own tax advisor for a full understanding of the tax consequences to you of the merger.

SWM’s Reasons for the Merger; Recommendation of SWM’s Board of Directors (page 80)

The SWM board of directors has unanimously (i) approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger, (ii) determined that the merger agreement and the transactions contemplated thereby are fair to, and in the best interests of, SWM and its stockholders and (iii) resolved to recommend that the SWM stockholders approve the SWM share issuance proposal. The SWM board of directors unanimously recommends that SWM stockholders vote “FOR” the SWM share issuance proposal and “FOR” the SWM adjournment proposal.

For a more detailed discussion of the SWM board of directors’ recommendation, see the section entitled “The Merger—SWM’s Reasons for the Merger; Recommendation of SWM’s Board of Directors” beginning on page 80.

Neenah’s Reasons for the Merger; Recommendation of Neenah’s Board of Directors (page 92)

The Neenah board of directors has unanimously (i) determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable, fair to and in the best interests of Neenah and its stockholders, (ii) approved and adopted the merger agreement and the execution, delivery and performance by Neenah of the merger agreement and the transactions contemplated thereby, including the merger, and (iii) recommended that Neenah’s stockholders approve the merger proposal. The Neenah board of directors unanimously recommends that Neenah stockholders vote FOR the Neenah merger proposal, FOR the Neenah compensation proposal and FOR the Neenah adjournment proposal. For a more detailed discussion of the Neenah board of directors’ recommendation, see the section entitled “The Merger—Neenah’s Reasons for the Merger; Recommendation of Neenah’s Board of Directors” beginning on page 92.

 

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Opinion of SWM’s Financial Advisor (page 83)

SWM engaged J.P. Morgan Securities, LLC (which we refer to as “J.P. Morgan”) as financial advisor in connection with SWM’s consideration of the proposed merger.

At the meeting of the SWM board of directors on March 27, 2022, at which the merger agreement was approved, J.P. Morgan rendered its oral opinion to the SWM board of directors, subsequently confirmed by delivery to the SWM board of directors of a written opinion dated March 27, 2022, that, as of such date and based upon and subject to the various factors and assumptions made, procedures followed, matters considered and the qualifications and limitations on the scope of review undertaken by J.P. Morgan set forth in its written opinion, the exchange ratio was fair, from a financial point of view, to SWM.

The full text of the written opinion of J.P. Morgan dated March 27, 2022, which sets forth, among other things, the assumptions made, matters considered and limits on the review undertaken, is attached as Annex B to this joint proxy statement/prospectus and is incorporated herein by reference. The summary of the opinion of J.P. Morgan set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of such opinion. SWM’s stockholders are urged to read the opinion in its entirety. J.P. Morgan’s written opinion was addressed to the SWM board of directors (in its capacity as such) in connection with and for the purposes of its evaluation of the proposed merger, was directed only to the fairness, from a financial point of view, of the exchange ratio in the proposed merger to SWM and did not address any other aspect of the merger. J.P. Morgan expressed no opinion as to the fairness of the exchange ratio to the holders of any class of securities, creditors or other constituencies of SWM or as to the underlying decision by SWM to engage in the proposed merger. The issuance of J.P. Morgan’s opinion was approved by a fairness committee of J.P. Morgan. The opinion does not constitute a recommendation to any stockholder of SWM as to how such stockholder should vote with respect to the proposed merger or any other matter.

For more information, see the section entitled “The Merger—Opinion of SWM’s Financial Advisor” on page 83.

Opinion of Neenah’s Financial Advisor (page 96)

The Neenah board of directors retained Perella Weinberg Partners LP (which we refer to as “Perella Weinberg”) to act as its financial advisor in connection with the merger. On March 27, 2022, Perella Weinberg rendered to the Neenah board of directors its oral opinion, subsequently confirmed in writing, that, as of such date and based upon and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations set forth therein, the exchange ratio provided for pursuant to the merger agreement was fair, from a financial point of view, to the holders of outstanding shares of Neenah common stock (other than SWM and its affiliates).

The full text of Perella Weinberg’s written opinion, dated March 27, 2022, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken by Perella Weinberg, is attached as Annex C to this joint proxy statement/prospectus and is incorporated by reference herein. Perella Weinberg’s opinion was addressed to and provided for the information and assistance of the Neenah board of directors, in its capacity as such, in connection with, and for the purpose of, the Neenah board of directors’ evaluation of the exchange ratio from a financial point of view, and does not address any other term, aspect or implication of the merger agreement or the merger. Perella Weinberg’s opinion does not address the underlying decision by Neenah to engage in the merger nor the relative merits of the merger compared with any alternative transactions or business strategies. Perella Weinberg’s opinion was not intended to be and does not constitute a recommendation to any holder of shares of Neenah common stock as to how such holder should vote or

 

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otherwise act with respect to the merger or any other matter. Perella Weinberg’s opinion does not in any manner address what the value of shares of SWM common stock actually will be when issued or the prices at which shares of Neenah common stock or SWM common stock will trade at any time, including following announcement or completion of the merger. In addition, Perella Weinberg expressed no opinion as to the fairness of the merger to the holders of any other class of securities, creditors or other constituencies of Neenah.

For more information, see the section entitled “The Merger—Opinion of Neenah’s Financial Advisor” on page 96.

No Appraisal Rights in the Merger (page 127)

Under the DGCL, SWM stockholders and Neenah stockholders are not entitled to appraisal rights in connection with the merger. For more information, see “The Merger—Appraisal Rights” beginning on page 127.

Interests of SWM’s Directors and Executive Officers in the Merger (page 107)

In considering the SWM board of directors’ recommendation to vote FOR the SWM share issuance proposal, SWM stockholders should be aware that SWM’s directors and executive officers may have interests in the merger that are different from, or in addition to, those of SWM stockholders generally and that may create potential conflicts of interest. These interests include that, following the closing of the merger, certain of SWM’s directors and executive officers will continue to serve as directors or executive officers, as applicable, of the combined company. The SWM board of directors was aware of and considered these respective interests when deciding to adopt and approve the merger agreement.

For more information, see the section entitled “The Merger—Interests of SWM’s Directors and Executive Officers in the Merger” beginning on page 107.

Interests of Neenah’s Directors and Executive Officers in the Merger (page 111)

In considering the recommendation of Neenah’s board of directors to vote for the Neenah merger proposal, Neenah stockholders should be aware that the directors and executive officers of Neenah may have interests in the merger that are different from, or in addition to, the interests of Neenah stockholders generally and that may create potential conflicts of interest. These interests include that, following the closing of the merger, certain of Neenah’s directors and executive officers will continue to serve as directors or executive officers, as applicable, of the combined company, and Neenah’s President and Chief Executive Officer will serve as the Chief Executive Officer of the combined company. The Neenah board of directors was aware of these interests and considered them, among other matters, in evaluating and negotiating the merger agreement and approving the merger agreement, and in recommending to Neenah stockholders that they vote “FOR” the Neenah merger proposal.

For more information, see the sections entitled “The Merger—Interests of Neenah’s Directors and Executive Officers in the Merger” beginning on page 111 and “The Merger Agreement—Treatment of Neenah’s Equity Awards” beginning on page 129.

Governance of the Combined Company (page 117)

Certificates of Incorporation and Bylaws

The certificate of incorporation of SWM, as in effect immediately prior to the effective time, will be the certificate of incorporation of the combined company as of the effective time until thereafter amended in accordance with applicable law.

 

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Prior to closing, the SWM board of directors will take all actions necessary to cause the bylaws of SWM to be amended as set forth in Annex D to this joint proxy statement/prospectus (which amendment we refer to as the “SWM bylaw amendment”), and as so amended, effective upon the completion of the merger, the bylaws of SWM will be the bylaws of the combined company, until thereafter amended in accordance with applicable law. The bylaws of SWM, as amended pursuant to the SWM bylaw amendment, implement certain governance matters for the combined company from and after the effective time and until the date of the annual meeting of stockholders held in 2025, or December 31, 2025, if an annual meeting is not held in 2025 (which period we refer to as the “governance period”). Any amendment to the governance provisions included in the SWM bylaw amendment by the board of directors of the combined company will require a vote of 75% of the board of directors of the combined company.

At the effective time, Neenah’s certificate of incorporation will be amended and restated in its entirety, and as so amended and restated, will be Neenah’s certificate of incorporation as of the effective time until thereafter amended in accordance with applicable law. At the effective time, Neenah’s bylaws will be amended and restated in its entirety, in the form attached to the merger agreement, and as so amended and restated, will be the bylaws of Neenah as of the effective time until thereafter amended in accordance with applicable law.

Combined Company Board of Directors

The board of directors of the combined company will be composed of nine (9) members, of which:

 

   

five (5) directors will be designated by SWM, consisting of Dr. Rogers, as non-executive Chairman, Dr. Kimberly E. Ritrievi, Anderson D. Warlick, Jeffrey Keenan and Marco Levi, each of whom are independent; and

 

   

four (4) directors will be designated by Neenah, consisting of Ms. Schertell, Shruti Singhal, Tony R. Thene and William M. Cook, each of whom are independent except Ms. Schertell.

The SWM bylaw amendment provides that, from and after the effective time through the governance period, vacancies on the board of directors of the combined company created by the resignation, disqualification, removal from office or death of a director will be filled (i) in the case of a vacancy created by the resignation, disqualification, removal from office or death, or the nomination of a person following the end of the term of a continuing SWM director, by a majority of the continuing SWM directors then in office and (ii) in the case of a vacancy created by the resignation, disqualification, removal from office or death, or nomination of a person following the end of the term of, a continuing Neenah director, by a majority of the continuing Neenah directors then in office; provided that any such appointment or nomination will be made in accordance with applicable law and the rules of the NYSE.

The board of directors of the combined company will be divided into the following three (3) classes, with members of each class serving staggered three-year terms:

 

Name of Director

  

Class of Director

William M. Cook    Class I
Jeffrey Keenan    Class I
Marco Levi    Class I
Shruti Singhal    Class II
Tony R. Thene    Class II
Anderson D. Warlick    Class II
Julie Schertell    Class III
Dr. Kimberly E. Ritrievi    Class III
Dr. John D. Rogers    Class III

 

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At the effective time, the board of directors of the combined company is expected to determine that each of the directors on the board of directors of the combined company other than Ms. Schertell will qualify as independent directors, as defined under NYSE listing rules, and the board of directors of the combined company will consist of a majority of “independent directors,” as defined under the rules of the SEC and NYSE listing rules relating to director independence requirements.

Committees of the Board of Directors

SWM will take all actions necessary to cause the board of directors of the combined company to have three (3) standing committees for the duration of the governance period: (i) Audit Committee, (ii) Compensation Committee and (iii) Nominating and Governance Committee (which we refer to collectively as the “standing committees”). During the governance period, the SWM bylaw amendment requires that a vote of 75% of the board of directors of the combined company will be required to form any new committees. The Chairperson of the Audit Committee and the Compensation Committee will each be an SWM designated director, and the Chairperson of the Nominating and Governance Committee will be a Neenah designated director. The composition and size of each standing committee will be determined by the SWM directors and the Neenah directors of the combined company prior to or promptly following the effective time. Each standing committee will have at least one (1) Neenah-designated director and one (1) SWM designated director.

Management of the Combined Company

Following completion of the merger, certain executive officers of SWM and Neenah will continue employment with the combined company, including, Omar Hoek, the current Executive Vice President, Engineered Papers of SWM, who will continue as the Chief Operating Officer of the combined company, Sarma Malladi, the current Chief Information Officer of SWM, who will continue as the Chief Information Officer of the combined company, Ricardo Nunez, the current Executive Vice President and General Counsel of SWM, who will continue as the General Counsel, Secretary and Chief Compliance Officer of the combined company, Michael Rickheim, the current Executive Vice President, Chief Human Resources Officer & Chief Administrative Officer of Neenah, who will continue as the Chief Human Resources Officer & Administrative Officer of the combined company and Andrew Wamser, the current Executive Vice President and Chief Financial Officer of SWM, who will continue as the Chief Financial Officer of the combined company. The compensation and benefits programs applicable to the executive officers of the combined company may differ from those currently applicable to SWM’s and Neenah’s current executive officers; however, no merger-related adjustments to such compensation and benefits programs have been determined as of the date of this joint proxy statement/prospectus.

Chief Executive Officer

Ms. Schertell, the current Chief Executive Officer and President of Neenah, will serve as the Chief Executive Officer of the combined company.

A vote of 75% of the board of directors of the combined company will be required to remove or replace Ms. Schertell as Chief Executive Officer of the combined company during the governance period.

Non-Executive Chairman

Effective as of the effective time, Dr. Rogers, the current Chairman of SWM, will serve as the non-executive Chairman of the combined company’s board of directors.

Promptly after the annual meeting of stockholders for the combined company held in 2024 (or December 31, 2024, if an annual meeting of stockholders of the combined company is not held in 2024), the continuing SWM directors will also have the right to elect a replacement non-executive Chairman to the board of directors of the combined company following Dr. Rogers’ tenure, to serve until the end of the governance period, provided that such replacement is not a current or former executive officer of SWM.

 

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Headquarters and Name of the Combined Company After the Merger

As of the effective time, the combined company will be headquartered in Alpharetta, Georgia. SWM will change the name and the NYSE ticker symbol of the combined company to such new name and ticker symbol as mutually agreed upon by SWM and Neenah, which change may occur as of or after the effective time.

Regulatory Approvals (page 119)

To complete the merger, SWM and Neenah need to obtain approvals or consents from, and make filings with, antitrust authorities in the U.S., Austria, Germany and Poland. Subject to the terms of the merger agreement, SWM and Neenah have agreed to cooperate with each other and use reasonable best efforts to (i) take, or cause to be taken, all necessary actions and do, or cause to be done, all things necessary, proper or advisable to consummate and make effective the transactions contemplated by the merger agreement as promptly as practicable following the date of the merger agreement, (ii) make, or cause to be made, the registrations, declarations and filings required under the Hart-Scott-Rodino Antitrust Improvements Act of 1975, as amended (which we refer to as the “HSR Act”), and required or advisable under any other applicable competition laws with respect to the transactions contemplated by the merger agreement, (iii) prepare and file all necessary documentation to obtain as promptly as practicable all material permits, consents, approvals, clearances and authorizations of all third parties and governmental entities which are necessary or advisable to consummate the transactions contemplated by the merger agreement, and to comply with the terms and conditions of all such permits, consents, approvals, clearances and authorizations of all such governmental entities and (iv) seek to avoid or prevent the initiation of any investigation, claim, action, suit, arbitration, litigation or proceeding by or before any governmental entity challenging the merger agreement or the consummation of the transactions contemplated by the merger agreement. Under the terms of the merger agreement, neither SWM nor Neenah is required to take any action or agree to any condition or restriction in connection with obtaining these approvals that, individually or in the aggregate, would reasonably be expected to be material and adverse to SWM and its subsidiaries, taken as a whole, after giving effect to the merger, and including the projected synergies expected to result from the merger.

Under the provisions of the HSR Act, the merger cannot be completed until SWM and Neenah each file a notification and report form with the Federal Trade Commission (which we refer to as the “FTC”) and the Antitrust Division of the U.S. Department of Justice (which we refer to as the “Antitrust Division”) and the applicable waiting period thereunder has expired or been terminated.

The merger is also subject to clearance or approval by antitrust authorities in Austria, Germany and Poland. In each case, the merger cannot be completed until the parties file notifications and obtain clearance or approval to consummate the merger or the applicable waiting periods have expired or been terminated. The parties have agreed to cooperate with each other and use their reasonable best efforts to make these filings as promptly as reasonably practicable.

The parties submitted their respective HSR filings on April 12, 2022, and the waiting period expired on May 12, 2022, with no further action from the FTC or Antitrust Division. The parties also submitted the required notifications to the antitrust authorities in Austria, Germany and Poland on May 11, May 4 and May 6, 2022, respectively, and all waiting periods are scheduled to expire on or around June 9, 2022.

SWM and Neenah believe that they will be able to obtain all requisite regulatory approvals. However, there can be no assurance that all of the regulatory approvals described above will be obtained and, if obtained, there can be no assurances regarding the timing of the approvals, the companies’ ability to obtain the approvals on satisfactory terms or the absence of litigation challenging such approvals. In addition, there can be no assurance that such approvals, if obtained, will not impose conditions or requirements that, individually or in the aggregate,

 

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would or could reasonably be expected to have an adverse effect on the financial condition, results of operations, assets or business of the combined company following completion of the merger. There can likewise be no assurances that regulatory authorities will not attempt to challenge the merger or, if such a challenge is made, what the result of such challenge will be.

Description of Financing (page 120)

Consummation of the merger is not conditioned on SWM’s ability to obtain financing. SWM plans to use debt financing and cash on hand to fund certain fees and costs relating to the merger and to refinance certain of its existing indebtedness and certain existing indebtedness of Neenah. Such debt financing could take any of several forms or any combination of them, including but not limited to the following: (i) SWM may borrow up to $650.0 million under the delayed draw facility; (ii) SWM may borrow under the revolving credit facility; (iii) SWM may borrow under the bridge facility; and (iv) SWM may issue senior notes in the public and/or private capital markets.

For a more complete description of SWM’s debt financing for the merger, see the section entitled “The Merger—Description of Financing” beginning on page 120.

Expected Timing of the Merger

SWM and Neenah expect the merger to close in the second half of 2022. However, neither SWM nor Neenah can predict the actual date on which the merger will be completed, or if the merger will be completed at all, because completion is subject to conditions and factors outside the control of both companies. SWM and Neenah must first obtain the approval of SWM stockholders and Neenah stockholders for the merger, as well as obtain necessary regulatory approvals and satisfy certain other closing conditions.

Conditions to Complete the Merger (page 147)

As more fully described in this joint proxy statement/prospectus and in the merger agreement, the completion of the merger depends on a number of conditions being satisfied or, where legally permissible, waived. These conditions include:

 

   

the approval by the SWM stockholders of the SWM share issuance proposal;

 

   

the approval by the Neenah stockholders of the Neenah merger proposal;

 

   

the authorization for listing on the NYSE, subject to official notice of issuance, of the shares of SWM common stock that will be issuable pursuant to the merger agreement;

 

   

the requisite regulatory approvals having been made or obtained, or deemed obtained as a result of the expiration of all statutory waiting periods in respect thereof, as required;

 

   

the effectiveness of the Registration Statement of which this joint proxy statement/prospectus forms a part, and the absence of any stop order suspending the effectiveness of the Registration Statement, or proceedings for such purpose having been initiated or threatened by the SEC and not withdrawn;

 

   

no order, injunction or decree issued by any governmental entity of competent jurisdiction preventing the consummation of the merger being in effect, and no law, statute, rule, regulation, order, injunction or decree having been enacted, entered, promulgated or enforced by any governmental entity which prohibits or makes illegal the consummation of the merger;

 

   

the accuracy of the representations and warranties of the other parties contained in the merger agreement, generally as of the date on which the merger agreement was entered into and as of the

 

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closing date, subject to the materiality standards provided in the merger agreement (and the receipt by each party of a certificate dated as of the closing date and signed on behalf of the other parties by the chief executive officer or the chief financial officer from the other parties to such effect);

 

   

in the case of SWM’s obligation to complete the merger, the performance by Neenah in all material respects of all obligations, covenants and agreements required to be performed by it under the merger agreement at or prior to the closing date (and the receipt by SWM of a certificate dated as of the closing date and signed on behalf of Neenah by the chief executive officer or the chief financial officer to such effect);

 

   

in the case of Neenah’s obligation to complete the merger, the performance by SWM (i) in all respects of the obligations, covenants and agreements required to be performed by it (and within its control) regarding the actions necessary to adopt the governance provisions applicable to the combined company set forth in the merger agreement and the SWM bylaw amendment and (ii) in all material respects of all other obligations, covenants and agreements required to be performed by it under the merger agreement at or prior to the closing date (and the receipt by Neenah of a certificate dated as of the closing date and signed on behalf of SWM by the chief executive officer or the chief financial officer to such effect); and

 

   

receipt by each party of an opinion of its legal counsel (or, in the event that its legal counsel advises that it will not deliver such opinion, an additional legal counsel selected in accordance with the merger agreement) to the effect that, on the basis of facts, representations and assumptions set forth or referred to in such opinion, the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code.

Termination of the Merger Agreement (page 148)

The merger agreement can be terminated at any time prior to completion of the merger, whether before or after the receipt of the approval by the SWM stockholders of the SWM share issuance proposal or the approval by the Neenah stockholders of the Neenah merger proposal, in the following circumstances:

 

   

by mutual written consent of SWM and Neenah;

 

   

by either SWM or Neenah if any governmental entity that must grant a requisite regulatory approval has denied approval of the merger and such denial has become final and nonappealable or any governmental entity of competent jurisdiction has issued a final and nonappealable order, injunction, decree or other legal restraint or prohibition permanently enjoining or otherwise prohibiting or making illegal the completion of the merger, unless the failure to obtain a requisite regulatory approval or the issuance of any such order, injunction, decree or other legal restraint or prohibition is due to the failure of the party seeking to terminate the merger agreement to perform or observe its obligations, covenants and agreements set forth in the merger agreement;

 

   

by either SWM or Neenah if the merger has not been completed on or before December 31, 2022 (which we refer to as the “initial termination date”); provided that, if, on the initial termination date, any of the requisite regulatory approvals have not been obtained and all of the other conditions set forth in the merger agreement have been satisfied or waived (other than those conditions that by their nature can only be satisfied at the closing, but subject to the satisfaction or waiver thereof assuming such date were the closing date), the initial termination date will be automatically extended for sixty (60) days or such longer period as may be mutually agreed by the parties;

 

   

by either SWM or Neenah (provided that the terminating party is not then in material breach of any representation, warranty, obligation, covenant or other agreement contained in the merger agreement) if there is a breach of any of the obligations, covenants or agreements or any of the representations or

 

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warranties (or if any such representation or warranty ceases to be true) set forth in the merger agreement on the part of Neenah, in the case of a termination by SWM, or SWM, in the case of a termination by Neenah, which breach or failure to be true, either individually or in the aggregate with all other breaches by such party (or failures of such representations or warranties to be true), would constitute, if occurring or continuing on the closing date, the failure of an applicable closing condition of the terminating party and which is not cured within forty-five (45) days following written notice to the other parties, or by its nature or timing cannot be cured during such period (or such fewer days as remain prior to the termination date);

 

   

by Neenah, if (i) SWM or the SWM board of directors has made a recommendation change or (ii) SWM or the SWM board of directors breaches in any material respect its obligations relating to non-solicitation of acquisition proposals or its obligations related to stockholder approval and the SWM board recommendation;

 

   

by SWM, if (i) Neenah or the Neenah board of directors has made a recommendation change or (ii) Neenah or the Neenah board of directors breaches in any material respect its obligations relating to non-solicitation of acquisition proposals or its obligations related to stockholder approval and the Neenah board of directors’ recommendation;

 

   

by either SWM or Neenah, if the approval of the Neenah stockholders of the Neenah merger proposal has not been obtained at the Neenah special meeting (including at any adjournment thereof); or

 

   

by either SWM or Neenah, if the approval of the SWM stockholders of the SWM share issuance proposal has not been obtained at the SWM special meeting (including at any adjournment thereof).

Termination Fee (page 150)

If the merger agreement is terminated by either SWM or Neenah under certain circumstances, including circumstances involving alternative acquisition proposals and changes in the recommendation by Neenah or SWM or their respective boards, Neenah or SWM may be required to pay a termination fee to the other equal to $24 million.

Accounting Treatment (page 119)

SWM and Neenah prepare their respective financial statements in accordance with generally accepted accounting principles in the U.S. (which we refer to as “GAAP”). The merger will be accounted for using the acquisition method of accounting, and SWM will be treated as the acquirer for accounting purposes.

The Rights of Neenah Stockholders Will Change as a Result of the Merger (page 171)

Neenah stockholders will have different rights once they become combined company stockholders due to differences between Neenah’s amended and restated certificate of incorporation (which we refer to as “Neenah’s certificate of incorporation”) and bylaws and SWM’s certificate of incorporation and bylaws.

These differences are described in more detail under the section entitled “Comparison of the Rights of Neenah Stockholders and SWM Stockholders” beginning on page 171.

Listing of SWM Common Stock; Delisting and Deregistration of Neenah Common Stock (page 127)

The shares of SWM common stock to be issued in the merger will be listed for trading on the NYSE. Following the merger, shares of SWM common stock will continue to be traded on the NYSE. SWM will change the name and the NYSE ticker symbol of the combined company to such new name and ticker symbol as mutually agreed upon by SWM and Neenah, which change may occur as of or after the effective time. Upon completion of the merger, Neenah common stock will be delisted from the NYSE and deregistered under the Exchange Act.

 

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The SWM Special Meeting (page 148)

SWM will hold a special meeting of SWM stockholders virtually via live webcast on the Internet at www.cesonlineservices.com/swm22_vm, on June 29, 2022, at 8:00 a.m. Eastern Time, to consider and vote on the following matters:

 

   

the SWM share issuance proposal; and

 

   

the SWM adjournment proposal.

SWM has fixed the close of business on May 20, 2022, as the record date for the SWM special meeting and any adjournment or postponement thereof. Only SWM stockholders of record at that time are entitled to notice of, and to vote at, the SWM special meeting, or any adjournment or postponement of the SWM special meeting. During the SWM special meeting, SWM stockholders will be able to examine the list of the stockholders entitled to vote at the SWM special meeting by following the instructions on the live webcast. Approval of both the SWM share issuance proposal and the SWM adjournment proposal requires the affirmative vote of a majority of the shares of SWM common stock which are present in person (via the Internet) or by proxy at the SWM special meeting and entitled to vote thereon.

The SWM board of directors has unanimously (i) approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger, (ii) determined that the merger agreement and the transactions contemplated thereby are fair to, and in the best interests of, SWM and its stockholders and (iii) resolved to recommend that the SWM stockholders approve the SWM share issuance proposal. The SWM board of directors unanimously recommends that SWM stockholders vote “FOR” the SWM share issuance proposal and “FOR” the SWM adjournment proposal.

For a more complete description of the SWM special meeting, see the section entitled “The SWM Special Meeting” beginning on page 148.

The Neenah Special Meeting (page 54)

Neenah will hold a special meeting of the Neenah stockholders virtually, via live webcast on the Internet at www.virtualshareholdermeeting.com/NP2022SM, on June 29, 2022, at 9:00 a.m. Eastern Time. At the Neenah special meeting, the Neenah stockholders will be asked to consider and vote on the following matters:

 

   

the Neenah merger proposal;

 

   

the Neenah compensation proposal; and

 

   

the Neenah adjournment proposal.

The Neenah board of directors has unanimously (i) determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable, fair to and in the best interests of Neenah and its stockholders, (ii) approved and adopted the merger agreement and the execution, delivery and performance by Neenah of the merger agreement and the transactions contemplated thereby, including the merger, and (iii) recommended that Neenah’s stockholders approve the merger proposal. The Neenah board of directors unanimously recommends that Neenah stockholders vote “FOR” the Neenah merger proposal, “FOR” the Neenah compensation proposal and “FOR” the Neenah adjournment proposal.

Risk Factors (page 38)

In evaluating the merger agreement and the merger, including the issuance of shares of SWM common stock in the merger, you should carefully read this joint proxy statement/prospectus and give special consideration to the factors discussed in the section entitled “Risk Factors” beginning on page 38.

 

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SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF SWM

The following table presents selected consolidated historical financial data of SWM. The selected consolidated historical financial data as of and for the years ended December 31, 2021 and 2020 have been derived from SWM’s audited consolidated financial statements and accompanying notes contained in SWM’s Annual Report on Form 10-K for the year ended December 31, 2021, which is incorporated into this joint proxy statement/prospectus by reference. The selected consolidated historical financial data as of and for the years ended December 31, 2019, 2018, and 2017 have been derived from SWM’s audited consolidated financial statements and accompanying notes filed with the SEC and not included or incorporated by reference in this joint proxy statement/prospectus. The selected consolidated historical financial data as of and for the three (3) months ended March 31, 2022 and 2021 have been derived from SWM’s unaudited consolidated financial statements contained in SWM’s Quarterly Report on Form 10-Q for the period ended March 31, 2022, which is incorporated into this joint proxy statement/prospectus by reference. Historical financial data as of and for the three (3) months ended March 31, 2022 and 2021 are unaudited and include, in SWM’s management’s opinion, all known adjustments necessary for a fair presentation of the results of operations and financial condition of SWM. These adjustments consist of normal recurring accruals and estimates that affect the carrying amount of assets and liabilities. You should not assume the results of operations for past periods are indicative of results for any future periods.

The information set forth below is only a summary. You should read the selected financial data set forth below in conjunction with (i) “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations,” (ii) “Item 8—Financial Statements and Supplementary Data” and (iii) the historical consolidated financial statements of SWM and the related notes, in each case, presented in SWM’s Annual Report on Form 10-K for the year ended December 31, 2021, which is incorporated by reference into this joint proxy statement/prospectus. You should also read this information in conjunction with the historical consolidated financial statements of SWM and related notes presented in SWM’s Quarterly Reports on Form 10-Q for the period ended March 31, 2022. SWM’s historical consolidated financial information may not be indicative of the future performance of SWM or the combined company. For more information, see the section entitled “Where You Can Find More Information” beginning on page 188.

 

    Three Months ended
March 31,
    Year ended December 31,  
(in millions, except per share data)   2022     2021     2021     2020     2019     2018     2017  

Income Statement Data:

             

Net sales

  $ 406.8     $ 288.2     $ 1,440.0     $ 1,074.4     $ 1,022.8     $ 1,041.3     $ 982.1  

Restructuring and impairment expense

    13.2       1.7       10.1       11.9       3.7       1.7       8.1  

Income from operations

    10.6       33.5       83.3       128.8       134.0       135.0       128.3  

Income from continuing operations

    1.6       21.6       88.9       83.8       85.8       94.8       34.4  

Loss from discontinued operations

    —         —         —         —         —         (0.3     0.1  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

    1.6       21.6       88.9       83.8       85.8       94.5       34.5  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Per Share Data:

             

Basic earnings per share:

             

Continuing operations

  $ 0.05     $ 0.69     $ 2.83     $ 2.68     $ 2.78     $ 3.08     $ 1.12  

Discontinued operations

    —         —         —         —         —         (0.01     —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    0.05       0.69       2.83       2.68       2.78       3.07       1.12  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per share:

             

Continuing operations

  $ 0.05     $ 0.68     $ 2.80     $ 2.66     $ 2.76     $ 3.07     $ 1.12  

Discontinued operations

    —         —         —         —         —         (0.01     —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    0.05       0.68       2.80       2.66       2.76       3.06       1.12  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash dividends declared per common share

  $ 0.44     $ 0.44     $ 1.76     $ 1.76     $ 1.76     $ 1.73     $ 1.69  

 

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    As of March 31,     As of December 31,  
(in millions)   2022     2021     2021     2020     2019     2018     2017  

Balance sheet data:

             

Total assets

  $ 2,441.9     $ 1,587.5     $ 2,420.3     $ 1,584.9     $ 1,471.7     $ 1,466.5     $ 1,542.5  

Total debt

    1,276.4       617.9       1,270.3       593.3       542.7       622.1       684.2  

 

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SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF NEENAH

The following table presents selected consolidated historical financial data of Neenah. The selected consolidated historical financial data as of and for the years ended December 31, 2021 and 2020 have been derived from Neenah’s audited consolidated financial statements and accompanying notes contained in Neenah’s Annual Report on Form 10-K for the year ended December 31, 2021, which is incorporated into this joint proxy statement/prospectus by reference. The selected consolidated historical financial data as of and for the years ended December 31, 2019, 2018, and 2017 have been derived from Neenah’s audited consolidated financial statements and accompanying notes filed with the SEC and not included or incorporated by reference in this joint proxy statement/prospectus. The selected consolidated historical financial data as of and for the three (3) months ended March 31, 2022 and 2021 have been derived from Neenah’s unaudited consolidated financial statements contained in Neenah’s Quarterly Report on Form 10-Q for the period ended March 31, 2022, which is incorporated into this joint proxy statement/prospectus by reference. Historical financial data as of and for the three (3) months ended March 31, 2022 and 2021 are unaudited and include, in Neenah’s management’s opinion, all known adjustments necessary for a fair presentation of the results of operations and financial condition of Neenah. These adjustments consist of normal recurring accruals and estimates that affect the carrying amount of assets and liabilities. You should not assume the results of operations for past periods are indicative of results for any future periods.

The information set forth below is only a summary. You should read the selected financial data set forth below in conjunction with (i) “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations,” (ii) “Item 8—Financial Statements and Supplementary Data” and (iii) the historical consolidated financial statements of Neenah and the related notes, in each case, presented in Neenah’s Annual Report on Form 10-K for the year ended December 31, 2021, which is incorporated by reference into this joint proxy statement/prospectus. You should also read this information in conjunction with the historical consolidated financial statements of Neenah and related notes presented in Neenah’s Quarterly Reports on Form 10-Q for the period ended March 31, 2022. Neenah’s historical consolidated financial information may not be indicative of the future performance of Neenah or the combined company. For more information, see the section entitled “Where You Can Find More Information” beginning on page 188.

 

    Three Months ended
March 31,
    Year ended December 31,  
(in millions, except per share data)       2022             2021         2021     2020     2019     2018     2017  

Income Statement Data:

             

Net sales

  $ 284.8     $ 227.0     $ 1,028.5     $ 792.6     $ 938.5     $ 1,034.9     $ 979.9  

Income from operations

    12.2       13.6       (11.8     (6.1     78.3       54.1       104.3  

Income (loss) from continuing operations

    5.7       8.3       (24.9     (15.8     55.4       37.2       80.3  

Loss from discontinued operations

    —         —         —         —         —         (0.8     —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

    5.7       8.3       (24.9     (15.8     55.4       36.4       80.3  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Per Share Data:

             

Basic earnings per share

             

Continuing operations

  $ 0.34     $ 0.49     $ (1.49   $ (0.96   $ 3.27     $ 2.20     $ 4.74  

Discontinued operations

    —         —         —         —         —         (0.05     —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    0.34       0.49       (1.49     (0.96     3.27       2.15       4.74  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per share

             

Continuing operations

  $ 0.34     $ 0.49     $ (1.49   $ (0.96   $ 3.26     $ 2.17     $ 4.68  

Discontinued operations

    —         —         —         —         —         (0.05     —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    0.34       0.49       (1.49     (0.96     3.26       2.12       4.68  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash dividends declared per common share

  $ 0.48     $ 0.47     $ 1.89     $ 1.88     $ 1.80     $ 1.64     $ 1.48  

 

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     As of March 31,      As of December 31,  
(in millions)    2022      2021      2021      2020      2019      2018      2017  

Balance sheet data:

                    

Total assets

   $ 1,105.8      $ 823.2      $ 1,081.7      $ 806.6      $ 827.8      $ 861.2      $ 904.4  

Total debt

 

     483.1        192.0        462.5        194.4        200.8        239.1        255.1  

 

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following tables present unaudited pro forma condensed combined financial information about the combined company’s consolidated balance sheet and statement of income after giving effect to the merger. The information under “Unaudited Pro Forma Condensed Combined Balance Sheet Data” in the table below gives effect to the merger as if it had taken place on March 31, 2022. The information under “Unaudited Pro Forma Condensed Combined Income Statement Data” in the table below gives effect to the merger as if it had taken place on January 1, 2021. This selected unaudited pro forma condensed combined financial information was prepared using the acquisition method of accounting where SWM is considered the acquirer of Neenah for accounting purposes. In addition, this selected unaudited pro forma condensed combined financial information includes the pre-acquisition results of Scapa Group plc. for SWM’s acquisition on April 15, 2021 and the pre-acquisition results of Global Release Liners, S.L., the parent company of Industrias de Transformacion de Andoain, S.A. for Neenah’s acquisition on April 6, 2021.

This selected unaudited pro forma condensed combined financial information has been prepared for illustrative purposes only and is based on currently available information and assumptions and estimates considered appropriate by SWM management; however, it is not necessarily indicative of what the combined company’s consolidated financial condition or results of operations actually would have been assuming the merger had been completed as of the dates indicated, nor does it purport to represent the combined company’s consolidated balance sheet or statement of income for future periods. The unaudited pro forma condensed combined financial information includes adjustments that are preliminary and may be revised. There can be no assurance that such revisions will not result in material changes. Future results may vary significantly from the results reflected due to various factors, including those discussed in the section entitled “Risk Factors” beginning on page 38. The information presented below should be read in conjunction with the historical consolidated financial statements of SWM and Neenah, including the related notes, filed by each of them with the SEC, in addition to the unaudited pro forma condensed combined financial information of SWM and Neenah, including the related notes appearing elsewhere in this joint proxy statement/prospectus. See the sections entitled “Where You Can Find More Information” and “Unaudited Pro Forma Condensed Combined Financial Information” beginning on pages 188 and 152, respectively, of this joint proxy statement/prospectus.

 

     Three Months
Ended March 31,
2022
     Year Ended
  December 31,  
2021
 
(in millions, except per share data)       

Unaudited Pro Forma Condensed Combined Income Statement Data:

     

Net sales

   $ 691.6      $ 2,628.4  

Operating income

     19.6        55.7  

Net income

     1.8        21.0  

Net income per share:

     

Basic

   $ 0.03      $ 0.37  

Diluted

     0.03        0.37  

 

     As of March 31,
2022
 
(in millions)       

Unaudited Pro Forma Condensed Combined Balance Sheet Data:

  

Total assets

   $ 4,001.4  

Total debt

     1,929.8  

 

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COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA

The historical per share data for SWM and Neenah below has been derived from the audited consolidated financial statements of each of SWM and Neenah as of and for the year ended December 31, 2021, each of which is incorporated by reference herein, and the unaudited consolidated financial statements of each of SWM and Neenah as of and for the three (3) months ended March 31, 2022.

The unaudited pro forma and pro forma combined equivalent per share data set forth below gives effect to the merger as if it had occurred on January 1, 2021, the beginning of the earliest period presented, in the case of earnings per share data, and as of March 31, 2022, in the case of book value per share data, assuming that each outstanding share of Neenah common stock had been converted into shares of SWM common stock based on the exchange ratio. The unaudited pro forma combined per share data has been derived from the “Unaudited Pro Forma Condensed Combined Financial Information” beginning on page 152.

The unaudited pro forma combined per share data has been derived using the acquisition method of accounting. See the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” beginning on page 152 for more information. Accordingly, the pro forma adjustments reflect the assets and liabilities of Neenah at their preliminary estimated fair values. Differences between these preliminary estimates and the final values in acquisition accounting will occur and these differences could have a material effect on the unaudited pro forma combined per share information set forth below.

The unaudited pro forma combined per share data does not purport to represent the actual results of operations that the combined company would have achieved had the merger been completed during these periods or to project the future results of operations that the combined company may achieve after the merger.

The unaudited pro forma combined per share equivalent data set forth below shows the effect of the merger from the perspective of an owner of Neenah common stock. The information was calculated by multiplying the unaudited pro forma combined per share data by the exchange ratio.

You should read the information below in conjunction with the selected consolidated historical financial data included elsewhere in this joint proxy statement/prospectus and the historical consolidated financial statements of SWM and Neenah and related notes that have been filed with the SEC, certain of which are incorporated by reference herein. See the sections entitled “Selected Consolidated Historical Financial Data of SWM”, “Selected Consolidated Historical Financial Data of Neenah” and “Where You Can Find More Information” beginning on pages 26, 28 and 188, respectively. The unaudited pro forma combined per share data has been derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial statements and related notes included in this joint proxy statement/prospectus. See the sections entitled “Unaudited Pro Forma Condensed Combined Financial Information” beginning on page 152, which are based on and should be read in conjunction with (i) the historical audited consolidated financial statements of SWM and the related notes included in SWM’s Annual Report on Form 10-K for the year ended December 31, 2021, and the unaudited consolidated financial statements contained in SWM’s Quarterly Report on Form 10-Q for the period ended March 31, 2022 and (ii) the historical audited consolidated financial statements of Neenah and the related notes included in Neenah’s Annual Report on Form 10-K for the year ended December 31, 2021, and the unaudited consolidated financial statements contained in Neenah’s Quarterly Report on Form 10-Q for the period ended March 31, 2022, each of which is incorporated by reference herein.

 

     As of and for the
Three Months Ended
March 31, 2022
     As of and for the
Year Ended
December 31, 2021
 

SWM Historical Per Share Data

     

Earnings per share—basic

   $ 0.05      $ 2.83  

Earnings per share—diluted

   $ 0.05      $ 2.80  

Cash dividends declared per common share

   $ 0.44      $ 1.76  

Book value per share

   $ 22.12      $ 21.69  

 

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     As of and for the
Three Months Ended
March 31, 2022
     As of and for the
Year Ended
December 31, 2021
 

Neenah Historical Per Share Data

     

Earnings per share—basic

   $ 0.34      $ (1.49

Earnings per share—diluted

   $ 0.34      $ (1.49

Cash dividends declared per common share

   $ 0.48      $ 1.89  

Book value per share

   $ 18.33      $ 18.83  

 

     As of and for the
Three Months Ended
March 31, 2022
     As of and for the
Year Ended
December 31, 2021
 

Unaudited Pro forma Combined Per Share Data

     

Earnings per share—basic

   $ 0.03      $ 0.37  

Earnings per share—diluted

   $ 0.03      $ 0.37  

Cash dividends declared per common share (1)

     N/A        N/A  

Book value per share

   $ 23.07        N/A  

 

     As of and for the
Three Months Ended
March 31, 2022
     As of and for the
Year Ended
December 31, 2021
 

Unaudited Pro forma Combined Equivalent Per Share Data for Neenah(2)

     

Earnings per share—basic

   $ 0.04      $ 0.50  

Earnings per share—diluted

   $ 0.04      $ 0.50  

Cash dividends declared per common share (1)

     N/A        N/A  

Book value per share

   $ 31.33        N/A  

 

(1)

Pro forma combined cash dividends per common share is not presented as the dividend policy for the combined company will be determined by the SWM board of directors following the completion of the merger.

(2)

The unaudited pro forma combined equivalent per share data for Neenah was calculated by multiplying the preliminary unaudited pro forma combined per share data by the exchange ratio of 1.358.

 

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COMPARATIVE PER SHARE MARKET PRICES AND IMPLIED VALUE OF MERGER CONSIDERATION

SWM common stock is listed on the NYSE under the symbol “SWM,” and Neenah common stock is listed on the NYSE under the symbol “NP.”

The table below sets forth, for the periods indicated, the per share high and low sales prices for SWM common stock and for Neenah common stock, each as reported on the NYSE.

 

     SWM
common
stock
NYSE
     Neenah
common
stock
NYSE
 
     High(1)      Low(1)      High(1)      Low(1)  

Annual information for the past five (5) calendar years

           

2021

   $ 50.52      $ 28.50      $ 60.95      $ 43.97  

2020

   $ 41.99      $ 21.00      $ 72.18      $ 34.82  

2019

   $ 45.58      $ 25.65      $ 74.68      $ 57.16  

2018

   $ 47.86      $ 24.98      $ 95.95      $ 57.77  

2017

   $ 46.94      $ 36.53      $ 92.45      $ 73.25  

Quarterly information for the past two (2) calendar years

           

2021

           

Fourth Quarter

   $ 37.94      $ 28.50      $ 55.93      $ 43.97  

Third Quarter

   $ 40.04      $ 33.68      $ 51.88      $ 44.24  

Second Quarter

   $ 49.74      $ 38.86      $ 56.93      $ 49.32  

First Quarter

   $ 50.52      $ 37.14      $ 60.95      $ 50.92  

2020

           

Fourth Quarter

   $ 41.65      $ 30.98      $ 56.69      $ 36.64  

Third Quarter

   $ 34.71      $ 26.85      $ 50.40      $ 36.89  

Second Quarter

   $ 35.87      $ 26.05      $ 59.07      $ 38.33  

First Quarter

   $ 41.99      $ 21.00      $ 72.18      $ 34.82  

 

(1)

Share prices are based on closing prices.

The above table shows only historical data. The data may not provide meaningful information to Neenah stockholders in determining whether to approve the Neenah merger proposal. Neenah stockholders are urged to obtain current market quotations for Neenah common stock and SWM common stock and to review carefully the other information contained in, or incorporated by reference into, this joint proxy statement/prospectus, when considering whether to approve the Neenah merger proposal. For more information, see the section entitled “Where You Can Find Additional Information,” beginning on page 188.

 

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The following table sets forth the closing sale price per share of SWM common stock reported on the NYSE and Neenah common stock reported on the NYSE as of (1) March 25, 2022, the last trading day before the public announcement of the execution of the merger agreement and (2) May 20, 2022, the latest practicable trading date before the date of this joint proxy statement/prospectus. This table also shows the estimated implied value of the merger consideration payable for each share of Neenah common stock. This implied value was calculated by multiplying the closing prices per share of SWM common stock on those dates by the exchange ratio.

 

     Closing price of
SWM common
stock
     Closing price of
Neenah
common
stock
     Equivalent value
of merger
consideration of
Neenah common
stock based on
price of SWM
common stock
 

March 25, 2022

   $ 30.23      $ 38.21      $ 41.05  

May 20, 2022

   $ 26.31      $ 36.31      $ 35.73  

SWM stockholders and Neenah stockholders are advised to obtain current market quotations for SWM common stock and Neenah common stock. The market prices of SWM common stock and Neenah common stock will fluctuate between the date of this joint proxy statement/prospectus and the date of completion of the merger and thereafter (in the case of SWM common stock). No assurance can be given concerning the market price of Neenah common stock before the effective time or SWM common stock before or after the effective time. Changes in the market price of SWM common stock prior to the completion of the merger will affect the market value of the merger consideration that Neenah stockholders receive upon completion of the merger.

The table below sets forth the dividends declared per share of SWM common stock and the dividends declared per share of Neenah common stock for the periods indicated.

 

     SWM      Neenah  

Year Ended December 31,

     

2021

   $ 1.76      $ 1.885  

2020

   $ 1.76      $ 1.88  

2019

   $ 1.76      $ 1.80  

2018

   $ 1.73      $ 1.64  

2017

   $ 1.69      $ 1.48  

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain of the matters discussed in this joint proxy statement/prospectus that are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which are based on current expectations, estimates and projections about the industry and markets in which SWM and Neenah operate and beliefs of and assumptions made by SWM management and Neenah management, involve uncertainties that could significantly affect the financial condition, results of operations, business plans and future performance of SWM, Neenah or the combined company.

Words such as “believes,” “anticipates,” “expects,” “assumes,” “outlook,” “intends,” “targeted,” “estimates,” “forecasts,” “projects,” “plans,” “may,” “could,” “should,” “would” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying these statements. Such forward-looking statements include, but are not limited to, statements about the strategic rationale and financial benefits of the transaction, including expected future financial and operating results and the combined company’s plans, objectives, expectations and intentions. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future — including statements relating to projections of revenue, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; statements of plans and objectives of SWM or Neenah or their respective management or boards of directors, including those relating to products or services; and statements of future economic performance — are forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be attained, and therefore actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.

In addition to factors relating to the merger discussed under the caption “Risk Factors” beginning on page 38 and the factors previously disclosed in SWM’s and Neenah’s reports filed with the SEC, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance:

 

   

the occurrence of any event, change or other circumstances that could give rise to the right of one or both of SWM and Neenah to terminate the merger agreement;

 

   

the outcome of any legal proceedings that may be instituted against SWM, Neenah or their respective directors;

 

   

the ability to obtain regulatory approvals and meet other closing conditions to the merger on a timely basis or at all, including the risk that regulatory approvals required for the merger are not obtained on a timely basis or at all, or are obtained subject to conditions that are not anticipated or that could adversely affect the combined company or the expected benefits of the transaction;

 

   

the ability to obtain approval by SWM stockholders and Neenah stockholders on the expected terms and schedule;

 

   

difficulties and delays in integrating SWM’s and Neenah’s businesses;

 

   

failing to fully realize anticipated cost savings and other anticipated benefits of the merger when expected or at all;

 

   

business disruptions from the proposed merger that will harm SWM’s or Neenah’s business, including current plans and operations;

 

   

potential adverse reactions or changes to business relationships resulting from the announcement or completion of the merger, including as it relates to SWM’s or Neenah’s ability to successfully renew existing client contracts on favorable terms or at all and obtain new clients;

 

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the substantial indebtedness SWM expects to incur and assume in connection with the proposed transaction and the need to generate sufficient cash flows to service and repay such debt;

 

   

the possibility that SWM may be unable to achieve expected synergies and operating efficiencies within the expected time-frames or at all and to successfully integrate Neenah’s operations with those of SWM;

 

   

failing to comply with applicable laws or legal or regulatory developments;

 

   

inflation, currency and interest rate fluctuations;

 

   

the ability of SWM or Neenah to retain and hire key personnel;

 

   

the diversion of management’s attention from ongoing business operations;

 

   

the duration and effects of the COVID-19 pandemic, and general economic and business conditions, particularly in the context of the COVID-19 pandemic;

 

   

increases in maintenance and operating costs;

 

   

security threats;

 

   

reliance on technology and related cybersecurity risk;

 

   

trade restrictions or other changes to international trade arrangements;

 

   

transportation of hazardous materials;

 

   

various events which could disrupt operations, including geopolitical events, wars, conflicts, illegal blockades of rail networks, and natural events such as severe weather, droughts, fires, floods and earthquakes;

 

   

climate change;

 

   

labor negotiations and disruptions;

 

   

environmental claims;

 

   

uncertainties of investigations, proceedings or other types of claims and litigation;

 

   

risks and liabilities arising from train derailments;

 

   

timing and completion of capital programs;

 

   

uncertainty as to the long-term value of SWM common stock following the merger, including the dilution caused by SWM’s issuance of additional shares of its common stock in connection with the transaction;

 

   

the continued availability of capital and financing following the merger;

 

   

the business, economic and political conditions in the markets in which SWM and Neenah operate; and

 

   

events beyond SWM’s or Neenah’s control, such as acts of terrorism.

Any forward-looking statements speak only as of the date of this communication or as of the date they were made, and neither SWM nor Neenah undertakes any obligation to update forward-looking statements. For a more detailed discussion of these factors, also see the information under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in SWM’s and Neenah’s most recent annual reports on Form 10-K for the year ended December 31, 2021, and any material updates to these factors contained in any of SWM’s and Neenah’s future filings with the SEC.

As for the forward-looking statements that relate to future financial results and other projections, actual results will be different due to the inherent uncertainties of estimates, forecasts and projections and may be better or

 

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worse than projected and such differences could be material. Given these uncertainties, you should not place any reliance on these forward-looking statements. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

For additional information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please see the reports that SWM and Neenah have filed with the SEC as described under “Where You Can Find More Information” beginning on page 188.

We expressly qualify in their entirety all forward-looking statements attributable to either of us or any person acting on our behalf by the cautionary statements contained or referred to in this joint proxy statement/prospectus.

 

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RISK FACTORS

In addition to the other information contained in or incorporated by reference into this joint proxy statement/prospectus, including the matters addressed under the caption “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 35, you should carefully consider the following risk factors in deciding whether to vote for the approval of the merger agreement and the transactions contemplated thereby, including the merger and including the issuance of shares of SWM common stock in the merger.

Because the market price of SWM common stock may fluctuate, Neenah stockholders cannot be sure of the market value of the merger consideration they will receive.

In the merger, each share of Neenah common stock issued and outstanding immediately prior to the effective time (other than certain shares held by SWM or Neenah) will be converted into 1.358 shares of SWM common stock (plus cash in lieu of fractional shares). This exchange ratio is fixed and will not be adjusted to reflect any changes in the market price of either SWM common stock or Neenah common stock. Changes in the price of SWM common stock prior to the merger will affect the value that Neenah stockholders will receive in the merger. Neither SWM nor Neenah is permitted to terminate the merger agreement solely because of any increase or decrease in the market price of SWM common stock or Neenah common stock.

The prices of Neenah common stock and SWM common stock at the closing of the merger may vary from their prices on March 25, 2022, the last trading day before public announcement of the merger. Stock price changes may result from a variety of factors that are beyond the control of Neenah and SWM, including market reaction to the announcement of the merger, general market and economic conditions, changes in their respective businesses, operations, results and prospects and legal and regulatory considerations. Therefore, at the time of the Neenah special meeting, Neenah stockholders will not know the market value of the consideration to be received at the effective time. Holders of Neenah common stock should obtain current market quotations for SWM common stock and Neenah common stock.

The market price of SWM common stock after the merger may be affected by factors different from factors that have historically affected and are currently affecting SWM common stock or Neenah common stock.

Upon completion of the merger and the transactions contemplated by the merger agreement, Neenah stockholders will become SWM stockholders, and the combined company will operate an expanded business with a different mix of products, operations and associated risks and liabilities. Accordingly, the results of operations of the combined company and the market price of SWM common stock after the completion of the merger may be affected by factors different from those that have historically affected and are currently affecting the independent results of operations of each of SWM and Neenah and the respective market prices of SWM common stock and Neenah common stock.

Additionally, SWM stockholders and Neenah stockholders may not wish to continue to invest in the combined company, or may wish to dispose of some or all of their SWM common stock. If, before or after the effective time, large amounts of SWM common stock are sold, the market price of SWM common stock could decline.

For a discussion of the businesses of SWM and Neenah and certain factors to consider in connection with those businesses, see the documents incorporated by reference in this joint proxy statement/prospectus and referred to under “Where You Can Find More Information” beginning on page 188.

The dilution caused by the issuance of shares of SWM common stock in connection with the merger may adversely affect the market price of SWM common stock.

In connection with the payment of the merger consideration, based on the number of shares of Neenah stock outstanding as of May 20, 2022, SWM expects to issue approximately 22,799,712 shares of SWM common

 

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stock to Neenah stockholders. The dilution caused by the issuance of these new shares of SWM common stock may result in fluctuations in the market price of SWM common stock, including a stock price decrease.

Holders of SWM common stock and Neenah common stock will have a diluted ownership percentage and voting interest in the combined company after the merger and will exercise less influence over management.

Holders of SWM common stock and Neenah common stock currently have the right to vote in the election of the board of directors and on other matters affecting SWM and Neenah, respectively. In the merger, each holder of Neenah common stock who receives shares of SWM common stock will become a holder of common stock of the combined company, with a percentage ownership of the combined company that is smaller than the stockholder’s percentage ownership of, and voting interests in, Neenah immediately prior to the merger. We estimate that, upon completion of the merger, Neenah stockholders as of immediately prior to the merger will collectively own approximately 42% of the outstanding shares of the combined company immediately after the merger, and SWM stockholders as of immediately prior to the merger will collectively own approximately 58% of the outstanding shares of the combined company immediately after the merger (in each case, on a fully diluted basis and without regard to the fact that immediately prior to the merger, certain stockholders may own both SWM common stock and Neenah common stock). In addition, the board of directors of the combined company will be composed of nine (9) directors, of which five (5) will be designated by SWM and four (4) will be designated by Neenah.

Accordingly, Neenah stockholders, as a group, will have less than a majority of the ownership and voting power of the combined company, and therefore will be able to exercise less collective influence on the management and policies of the combined company than they currently are able to exercise on the management and policies of Neenah, and SWM stockholders may have less influence on the management and policies of the combined company than they now have on the management and policies of SWM.

The shares of SWM common stock to be received by Neenah stockholders as a result of the merger will have different rights from the shares of Neenah common stock.

In the merger, Neenah stockholders will become SWM stockholders, and their rights as stockholders will be governed by the certificate of incorporation and bylaws of the combined company. The rights associated with SWM common stock are different from the rights associated with Neenah common stock. See the section entitled “Comparison of the Rights of SWM Stockholders’ and Neenah Stockholders’” beginning on page 171 for a discussion of the different rights associated with SWM common stock.

Certain of SWM’s and Neenah’s directors and executive officers may have interests in the merger that may differ from the interests of SWM stockholders and Neenah stockholders.

SWM stockholders and Neenah stockholders should be aware that some of the SWM and Neenah directors and executive officers may have interests in the merger and have arrangements that are different from, or in addition to, those of SWM stockholders and Neenah stockholders generally. These interests and arrangements may create potential conflicts of interest. Both the SWM board of directors and Neenah board of directors were aware of these respective interests and considered these interests, among other matters, when making their respective decisions to approve the merger agreement, and in recommending that stockholders vote to approve the merger. For a more complete description of these interests, please see the sections entitled “The Merger—Interests of SWM’s Directors and Executive Officers in the Merger” beginning on page 107 and “The Merger—Interests of Neenah’s Directors and Executive Officers in the Merger” beginning on page 111.

 

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The fairness opinions obtained by the SWM board of directors and the Neenah board of directors from their respective financial advisors will not reflect changes, circumstances, developments or events that may have occurred or may occur after the date of the opinions.

J.P. Morgan, SWM’s financial advisor in connection with the merger, delivered to the SWM board of directors a written opinion, dated March 27, 2022, that, as of such date and based upon and subject to the various factors and assumptions set forth in its opinion, the exchange ratio in the proposed merger was fair, from a financial point of view, to SWM. Perella Weinberg, Neenah’s financial advisor in connection with the merger, delivered a written opinion, dated March 27, 2022, to the Neenah board of directors to the effect that, as of the date thereof, and based upon and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations set forth in such written opinion, the exchange ratio provided for pursuant to the merger agreement was fair, from a financial point of view, to the Neenah stockholders (other than SWM and its affiliates).

The SWM board of directors and the Neenah board of directors have not obtained updated fairness opinions as of the date of this joint proxy statement/prospectus from their respective financial advisors and do not expect to receive updated fairness opinions prior to the completion of the merger.

The fairness opinions do not reflect changes, circumstances, developments or events that may have occurred or may occur after the date of the opinions, including changes in the operations and prospects of SWM and Neenah or their respective operating companies, regulatory or legal changes, general market and economic conditions and other factors that may be beyond the control of SWM and Neenah and on which the fairness opinions were based and that may alter the value of SWM and Neenah or the prices of shares of SWM common stock or Neenah common stock at the effective time. The implied value of the stock consideration has fluctuated since, and could be materially different from its value as of the date of the opinions, and the opinions do not address the prices at which shares of SWM common stock or Neenah common stock may trade since the dates of the opinions. The opinions do not speak as of the time the merger will be completed or as of any date other than the dates of such opinions. The SWM board of directors and the Neenah board of directors do not anticipate asking their respective financial advisors to update their respective opinions, and none of the respective financial advisors has an obligation or responsibility to update, revise or reaffirm its respective opinion based on circumstances, developments or events that may have occurred or may occur after the date of such opinion. The opinions of the financial advisors to the SWM board of directors and the Neenah board of directors are attached as Annex B and Annex C, respectively, to this joint proxy statement/prospectus and are incorporated by reference herein.

SWM and Neenah are expected to incur substantial costs related to the merger and the integration of the businesses.

SWM and Neenah have incurred and expect to incur a number of non-recurring costs associated with the merger. These costs include financial advisory, legal, accounting, consulting and other advisory fees, severance/employee benefit-related costs, financing-related fees and costs, public company filing fees and other regulatory fees, printing costs and other related costs. Many of these costs are payable by either SWM or Neenah regardless of whether or not the merger is completed.

The combined company will also incur substantial integration costs in connection with the merger. There are a large number of processes, policies, procedures, operations, technologies and systems that must be integrated in connection with the merger and the integration of the two companies’ businesses, including purchasing, accounting and finance, sales, payroll, pricing and benefits.

While both SWM and Neenah have assumed that certain expenses would be incurred in connection with the merger and the integration of the businesses, there are many factors beyond their control that could affect the total amount or the timing of the integration expenses. Moreover, many of the costs that will be incurred are, by

 

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their nature, difficult to estimate accurately. Although SWM and Neenah expect that the elimination of duplicative costs and the realization of other economies of scale-related efficiencies related to the integration of the businesses may offset incremental merger-related and integration costs over time, any net benefit may not be achieved in the near term or at all. These integration costs may result in the combined company taking significant charges against earnings following the completion of the merger, and the amount and timing of such charges are uncertain at present.

Combining SWM and Neenah may be more difficult, costly or time consuming than expected, and SWM and Neenah may fail to realize some or all of the anticipated benefits of the merger.

The success of the merger will depend, in part, on the ability to realize the anticipated cost savings, operational synergies and other perceived benefits from combining the businesses of SWM and Neenah. To realize the cost savings, operational synergies and other perceived benefits from the merger, SWM and Neenah must successfully integrate and combine their businesses in a manner that permits those benefits to be realized. If SWM and Neenah are not able to achieve these objectives, the anticipated benefits of the merger may not be realized fully or at all, or may take longer to realize than expected. For example, the actual cost savings, operational synergies and other perceived benefits of the merger could be less than anticipated or take longer to realize than anticipated for a variety of reasons, including those set forth in these Risk Factors.

SWM and Neenah have operated and, until the completion of the merger, must continue to operate, independently. It is possible that the integration process could result in the loss of key employees, the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the companies’ ability to maintain relationships with employees, customers, suppliers or other business associates and constituencies or to achieve the anticipated benefits and cost savings of the merger. Integration efforts between the two companies may also divert management attention and resources. These integration matters could have an adverse effect on each of SWM and Neenah during this transition period and for an undetermined period after completion of the merger on the combined company.

The merger may result in a loss of customers, distributors, suppliers, vendors, landlords, joint venture partners and other business partners and may result in the termination of existing contracts.

Following the merger, some of the customers, distributors, suppliers, vendors, landlords, joint venture partners and other business partners of SWM or Neenah may terminate or scale back their current or prospective business relationships with the combined company. Some customers may not wish to source a larger percentage of their needs from a single company or may feel that the combined company is too closely allied with one of their competitors. In addition, SWM and Neenah have contracts with customers, distributors, suppliers, vendors, landlords, joint venture partners and other business partners that may require SWM or Neenah to obtain consents from these other parties in connection with the merger, which may not be obtained on favorable terms or at all. If relationships with customers, distributors, suppliers, vendors, landlords, joint venture partners and other business partners are adversely affected by the merger, or if the combined company, following the merger, loses the benefits of the contracts of SWM or Neenah, the combined company’s business and financial performance could suffer.

The combined company may be unable to retain SWM or Neenah personnel successfully prior to the effective time or after the merger is completed.

The success of the merger will depend in part on the combined company’s ability to retain the talents and dedication of key employees currently employed by SWM and Neenah. It is possible that these employees may decide not to remain with SWM or Neenah, as applicable, prior to the effective time or with the combined company after the merger is consummated. If SWM and Neenah are unable to retain key employees, including management, who are critical to the successful integration and future operations of the companies, SWM and Neenah could face disruptions in their operations, loss of existing customers, loss of key information, expertise

 

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or know-how and unanticipated additional recruitment costs. In addition, if key employees terminate their employment, the combined company’s business activities may be adversely affected, and management’s attention may be diverted from successfully integrating SWM and Neenah to hiring suitable replacements, all of which may cause the combined company’s business to suffer. In addition, SWM and Neenah may not be able to locate or retain suitable replacements for any key employees who leave either company. For more information, see the section entitled “The Merger—Governance of the Combined Company” beginning on page 117.

The combined company’s future results may suffer if it does not effectively manage its expanded operations following the merger.

Following the merger, the size of the business of the combined company will increase significantly beyond the current size of either SWM’s or Neenah’s business. The combined company’s future success will depend, in part, upon its ability to manage this expanded business, which will pose substantial challenges for management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity. There can be no assurances that the combined company will be successful or that it will realize the expected operating efficiencies, cost savings, revenue enhancements or other benefits currently anticipated from the merger.

The merger agreement subjects SWM and Neenah to restrictions on their respective business activities prior to the effective time.

The merger agreement subjects SWM and Neenah to restrictions on their respective business activities prior to the effective time. The merger agreement obligates each of SWM and Neenah to, and to cause each of its subsidiaries to, subject to specified exceptions, conduct its business in the ordinary course in all material respects and use reasonable best efforts to maintain and preserve intact its business organization, employees and advantageous business relationships. These restrictions could prevent SWM and Neenah from pursuing certain business opportunities that arise prior to the effective time and are outside the ordinary course of business. See the section entitled “The Merger Agreement—Covenants and Agreements—Conduct of Businesses Prior to the Completion of the Merger” beginning on page 134 for a description of the restrictive covenants applicable to SWM and Neenah.

The merger agreement limits SWM’s and Neenah’s respective ability to pursue alternatives to the merger and may discourage other companies from trying to acquire SWM or Neenah.

The merger agreement contains “no shop” covenants that restrict each of SWM’s and Neenah’s ability to, directly or indirectly, initiate, solicit, knowingly encourage or knowingly facilitate any inquiries or proposals with respect to any acquisition proposal, engage or participate in any negotiations with any person concerning any acquisition proposal, provide any confidential or nonpublic information or data to, or have or participate in any discussions with, any person relating to any acquisition proposal, subject to certain exceptions, or, unless the merger agreement has been terminated in accordance with its terms, approve or enter into any term sheet, letter of intent, commitment, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement or other agreement in connection with or relating to any acquisition proposal.

The merger agreement further provides that, during the 12-month period following the termination of the merger agreement under specified circumstances, including the entry into a definitive agreement or consummation of a transaction with respect to an alternative acquisition proposal, SWM or Neenah may be required to pay to the other party a cash termination fee equal to $24 million. See the section entitled “The Merger Agreement—Termination Fee” beginning on page 150.

These provisions could discourage a potential third-party acquirer that might have an interest in acquiring all or a significant portion of SWM or Neenah from considering or proposing that acquisition.

 

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The merger agreement may be terminated in accordance with its terms and the merger may not be completed, which could negatively affect SWM or Neenah, and, in certain circumstances, result in the requirement that SWM or Neenah pay a termination fee.

If the merger agreement is terminated and the merger is not completed, including as a result of either SWM stockholders failing to approve the SWM share issuance proposal or Neenah stockholders failing to approve the Neenah merger proposal, there may be various adverse consequences, and SWM and Neenah may experience negative reactions from the financial markets and from their respective customers and employees. For example, SWM’s or Neenah’s businesses may have been affected adversely by the failure to pursue other beneficial opportunities due to the focus of management on the merger, without realizing any of the anticipated benefits of completing the merger.

Additionally, each of SWM and Neenah has incurred and will incur substantial costs in connection with the negotiation and completion of the transactions contemplated by the merger agreement, as well as the costs of filing, printing and mailing this joint proxy statement/prospectus, and all filing and other fees paid to the SEC in connection with the merger. If the merger is not completed, SWM and Neenah would have to recognize these as expenses without realizing the expected benefits of the merger.

Moreover, if the merger agreement is terminated, the market price of SWM common stock or Neenah common stock could decline to the extent that the current market prices reflect a market assumption that the merger will be completed. If the merger agreement is terminated under certain circumstances, either SWM or Neenah may be required to pay a termination fee of $24 million to the other party, which, if payable at all, may not sufficiently compensate the party receiving such termination fee for the adverse effects arising out of such termination.

See the sections entitled “The Merger Agreement—Termination of the Merger Agreement,” “The Merger Agreement—Effect of Termination” and “The Merger Agreement—Termination Fee” beginning on pages 148, 149 and 150, respectively.

SWM will incur indebtedness in connection with the merger, which could adversely affect SWM and the combined company, including by decreasing the business flexibility of the combined company.

Consummation of the merger is not conditioned on SWM’s ability to obtain financing. SWM plans to use debt financing and cash on hand to fund certain fees and costs relating to the merger and to refinance certain of its existing indebtedness and certain existing indebtedness of Neenah. Such debt financing could take any of several forms or any combination of them, including but not limited to the following: (i) SWM may borrow up to $650.0 million under the delayed draw facility; (ii) SWM may borrow under the revolving credit facility; (iii) SWM may borrow under the bridge facility; and (iv) SWM may issue senior notes in the public and/or private capital markets. See the section entitled “The Merger—Description of Financing” beginning on page 120.

SWM’s increased level of debt and the covenants to which SWM will have agreed in connection with this debt financing could have negative consequences on SWM and the combined company, including, among other things, (i) requiring SWM, and the combined company, to dedicate a larger portion of cash flow from operations to servicing and repayment of the debt, (ii) reducing funds available for strategic initiatives and opportunities, working capital and other general corporate needs and (iii) limiting SWM’s, and the combined company’s, ability to incur certain kinds or amounts of additional indebtedness, which could restrict its flexibility to react to changes in its business, its industry and economic conditions.

The unaudited pro forma condensed combined financial information included in this joint proxy statement/prospectus is preliminary, and the actual financial condition and results of operations of the combined company following the merger may differ materially.

The unaudited pro forma condensed combined financial information in this joint proxy statement/prospectus is presented for illustrative purposes only and is not necessarily indicative of what the combined company’s actual

 

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financial condition or results of operations would have been had the merger been completed on the dates indicated. The unaudited pro forma condensed combined financial information reflects adjustments, which are based upon preliminary estimates, to reflect the Neenah identifiable assets to be acquired and liabilities to be assumed at fair value and the resulting goodwill. The fair value estimates reflected in this joint proxy statement/prospectus are preliminary, and final amounts will be based upon the actual consideration and the fair value of the assets and liabilities of Neenah as of the acquisition date for accounting purposes. Accordingly, the final acquisition accounting adjustments may differ materially from the pro forma adjustments reflected in this joint proxy statement/prospectus. For more information, see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” beginning on page 152.

Regulatory approvals may not be received, may take longer than expected, and regulatory authorities may impose conditions or requirements that are not presently anticipated or that could have an adverse effect on the combined company following the merger.

Before the merger can be completed, certain approvals, consents, clearances, orders and authorizations must be obtained from various antitrust and regulatory authorities in the United States and in foreign jurisdictions. The governmental entities from which these approvals are required may refuse to approve the merger or impose conditions or requirements for the completion of the merger. Any conditions or requirements imposed could have the effect of delaying or preventing completion of the merger. Even if the requisite regulatory approvals are granted, the relevant regulatory authorities may impose conditions, limitations, obligations or costs, or place restrictions on the conduct of the combined company’s business or require changes to the terms of the transactions contemplated by the merger agreement.

There can be no assurance that regulators will not impose any such conditions, limitations, obligations or restrictions and that such conditions, limitations, obligations or restrictions will not have the effect of delaying the completion of any of the transactions contemplated by the merger agreement, imposing additional material costs on or materially limiting the revenues of the combined company following the merger or otherwise reduce the anticipated benefits of the merger if the merger were consummated successfully within the expected timeframe. For more information, see the section entitled “The Merger—Regulatory Approvals” beginning on page 119.

SWM stockholders and Neenah stockholders will not have appraisal rights or dissenters’ rights in the merger.

Appraisal rights (also known as dissenters’ rights) are statutory rights that, if applicable under relevant law, enable stockholders to dissent from an extraordinary transaction, such as a merger, and to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to stockholders in connection with the extraordinary transaction.

Under Section 262 of the DGCL, stockholders do not have appraisal rights if the shares of stock they hold, as of the record date for determination of stockholders entitled to receive notice of the meeting of stockholders to act upon a merger, are either (i) listed on a national securities exchange or (ii) held of record by more than 2,000 stockholders, unless the stockholders receive in exchange for their shares anything other than (a) shares of stock of the surviving corporation, (b) shares of stock of any other corporation that at the effective time of the merger are listed on a national securities exchange or held by more than 2,000 stockholders of record, (c) cash in lieu of fractional shares or (d) any combination of the foregoing.

If the merger is completed, SWM stockholders will not receive any consideration and their shares of SWM common stock will remain outstanding and constitute shares of stock of the combined company. As a result, SWM stockholders are not entitled to appraisal rights in connection with the merger. Neenah common stock is listed on the NYSE, and because Neenah stockholders will receive shares of SWM common stock in the merger, which is also listed on the NYSE, Neenah stockholders are not entitled to appraisal rights in connection with the merger.

 

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Stockholder litigation could prevent or delay the closing of the merger or otherwise negatively affect the business and operations of SWM or Neenah.

SWM and Neenah may incur costs in connection with the defense or settlement of the lawsuit related to the proposed merger that has been filed, as of the date of this joint proxy statement/prospectus, by a purported Neenah stockholder, or the defense or settlement of any further stockholder lawsuits that may be filed in connection with the merger. Such litigation could have an adverse effect on the financial condition, results of operations and cash flows of SWM and Neenah and could prevent or delay the consummation of the merger. For more information, see “The Merger—Litigation Related to the Merger” beginning on page 127.

The COVID-19 pandemic may delay and adversely affect the completion of the merger.

The COVID-19 pandemic has created economic and financial disruptions that have adversely affected, and may continue to adversely affect, the business, financial condition, liquidity, capital and results of operations of SWM and Neenah. Even as efforts to contain the pandemic, including vaccinations, have made progress and some restrictions have relaxed, the impact of new variants that may emerge cannot be predicted at this time, and could depend on numerous factors, including the availability of vaccines in different parts of the world, vaccination rates among the population, the effectiveness of COVID-19 vaccines against such variants and the response by governmental bodies to reinstate restrictive measures or adopt additional requirements or restrictive measures. If the effects of the COVID-19 pandemic cause a continued or extended decline in the economic environment and the financial results of SWM or Neenah, or the business operations of SWM or Neenah are further disrupted as a result of the COVID-19 pandemic, efforts to complete the merger and integrate the businesses of SWM and Neenah may also be delayed and adversely affected.

Risks Relating to SWM’s Business

You should read and consider risk factors specific to SWM’s business that will also affect the combined company after the merger. These risks are described in the sections entitled “Risk Factors” in SWM’s Annual Report on Form 10-K for the year ended December 31, 2021, and in other documents incorporated by reference into this joint proxy statement/prospectus. Please see the section entitled “Where You Can Find More Information” beginning on page 188 for the location of information incorporated by reference into this joint proxy statement/prospectus.

Risks Relating to Neenah’s Business

You should read and consider risk factors specific to Neenah’s business that will also affect the combined company after the merger. These risks are described in the sections entitled “Risk Factors” in Neenah’s Annual Report on Form 10-K for the year ended December 31, 2021, and in other documents incorporated by reference into this joint proxy statement/prospectus. Please see the section entitled “Where You Can Find More Information” beginning on page 188 for the location of information incorporated by reference into this joint proxy statement/prospectus.

 

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INFORMATION ABOUT THE COMPANIES

SWM

Schweitzer-Mauduit International, Inc.

100 North Point Center East, Suite 600

Alpharetta, Georgia 30022

1-800-514-0186

Schweitzer-Mauduit International, Inc. is a Delaware corporation headquartered in Alpharetta, Georgia.

SWM is a leading global performance materials company, focused on finding ways to improve everyday life by bringing best-in-class innovation, design, and manufacturing solutions to its customers. SWM’s highly engineered films, adhesive tapes, foams, nets, nonwovens, and papers are designed and manufactured using resins, polymers, and natural fibers for a variety of industries and specialty applications. SWM and its subsidiaries manufacture on four continents, conduct business in over 90 countries and employ approximately 5,000 people worldwide.

SWM common stock is traded on the NYSE under the symbol “SWM.”

Additional information about SWM and its subsidiaries is included in documents incorporated by reference in

this joint proxy statement/prospectus. Please see “Where You Can Find More Information” beginning on page 188.

Neenah

Neenah, Inc.

3460 Preston Ridge Road, Suite 600

Alpharetta, Georgia 30005

(678) 566-6500

Neenah, Inc. is a Delaware corporation headquartered in Alpharetta, Georgia. Neenah is a leading global manufacturer of specialty materials, focused on growing in filtration media, specialty coatings, engineered materials and imaging and packaging. Neenah’s materials are in various products used every day, such as transportation and water filters, premium packaging of spirits, technology and beauty products, industrial labels, tapes and abrasives, and digital printing for high-end apparel. Neenah and its subsidiaries manufacture in North America and Europe, conduct business in over 90 countries and employ approximately 2,500 people worldwide.

Neenah’s common stock is traded on the NYSE under the symbol “NP.”

Additional information about Neenah and its subsidiaries is included in documents incorporated by reference in this joint proxy statement/prospectus. Please see “Where You Can Find More Information” beginning on page 188.

Merger Sub

Samurai Warrior Merger Sub, Inc.

c/o Schweitzer-Mauduit International, Inc.

100 North Point Center East, Suite 600

Alpharetta, Georgia 30022

1-800-514-0186

 

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Samurai Warrior Merger Sub, Inc., a Delaware corporation, is a wholly owned subsidiary of SWM. Merger Sub is newly formed, and was organized for the purpose of entering into the merger agreement and effecting the merger. Merger Sub has engaged in no business activities to date and it has no material assets or liabilities of any kind, other than those incident to its formation and those incurred in connection with the merger.

The Combined Company

Effective as of the effective time, the combined company will be headquartered in Alpharetta, Georgia. SWM will change the name and the NYSE ticker symbol of the combined company to such new name and ticker symbol as mutually agreed upon by SWM and Neenah, which change may occur as of or after the effective time.

 

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THE SWM SPECIAL MEETING

Date, Time and Place of Meeting

The SWM special meeting will be held virtually via live webcast on the Internet at www.cesonlineservices.com/swm22_vm, on June 29, 2022, at 8:00 a.m. Eastern Time.

Matters to Be Considered

At the SWM special meeting, SWM stockholders will be asked to consider and vote upon the following matters:

 

   

the SWM share issuance proposal; and

 

   

the SWM adjournment proposal.

Recommendation of the SWM Board of Directors

The SWM board of directors has determined that the merger is advisable and in the best interests of SWM and its stockholders and has unanimously adopted the merger agreement. The SWM board of directors unanimously recommends that SWM stockholders vote “FOR” the SWM share issuance proposal and “FOR” the SWM adjournment proposal. See “The Merger—SWM’s Reasons for the Merger; Recommendation of SWM’s Board of Directors” beginning on page 80 for a more detailed discussion of the SWM board of directors’ recommendation.

SWM Record Date and Quorum

The SWM board of directors has fixed the close of business on May 20, 2022, as the record date for determining the SWM stockholders entitled to receive notice of and to vote at the SWM special meeting and any adjournment or postponement thereof.

As of the SWM record date, there were 31,258,805 shares of SWM common stock outstanding and entitled to vote at the SWM special meeting held by approximately 1,426 holders of record. Each share of SWM common stock entitles the holder to one vote at the SWM special meeting on each proposal to be considered at the SWM special meeting.

The presence at the SWM special meeting, in person (via the Internet) or by proxy, of holders of a majority of the voting power of the SWM common stock issued and outstanding and entitled to vote will constitute a quorum for the transaction of business. All shares of SWM common stock present in person (via the Internet) or represented by proxy, including abstentions, will be treated as present for purposes of determining the presence or absence of a quorum for all matters voted on at the SWM special meeting.

Votes Required; Effect of Abstentions and Failure to Vote

SWM share issuance proposal:

 

   

Vote required: Approval of the SWM share issuance proposal requires the affirmative vote of a majority of the shares of SWM common stock which are present in person (via the Internet) or by proxy at the SWM special meeting and entitled to vote on the SWM share issuance proposal.

 

   

Effect of abstentions and failure to vote: If you attend the SWM special meeting in person (via the Internet) and do not vote, or if you submit a proxy card on which you indicate that you abstain from voting, this will have the effect of a vote “AGAINST” the SWM share issuance proposal.

If you are an SWM stockholder entitled to vote at the SWM special meeting and you do not attend the SWM special meeting in person (via the Internet), return a proxy, or provide voting instructions to your

 

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brokerage firm, your shares will not be voted and will not be treated as present for purposes of establishing a quorum, and assuming a quorum is present, this will have no effect on the SWM share issuance proposal.

Because it is expected that all proposals to be voted on at the SWM special meeting will be “non-routine” matters, it is unlikely that there will be any broker non-votes at the SWM special meeting.

SWM adjournment proposal:

 

   

Vote required: Approval of the SWM adjournment proposal requires the affirmative vote of a majority of the shares of SWM common stock which are present in person (via the Internet) or by proxy at the SWM special meeting and entitled to vote thereon.

 

   

Effect of abstentions and failure to vote: If you attend the SWM special meeting in person (via the Internet) and do not vote, or if you submit a proxy card on which you indicate that you abstain from voting, your abstention will have the effect of a vote “AGAINST” the SWM adjournment proposal.

If you are an SWM stockholder entitled to vote at the SWM special meeting and you do not attend the SWM special meeting in person (via the Internet), return a proxy, or provide voting instructions to your brokerage firm, your shares will not be voted and will not be treated as present for purposes of establishing a quorum, and assuming a quorum is present, this will have no effect on the SWM adjournment proposal.

Because it is expected that all proposals to be voted on at the SWM special meeting will be “non-routine” matters, it is unlikely that there will be any broker non-votes at the SWM special meeting.

Shares Held by Officers and Directors

As of the SWM record date, the directors and executive officers of SWM and their affiliates beneficially owned and were entitled to vote approximately 588,936 shares of SWM common stock representing approximately 2% of the shares of SWM common stock outstanding on that date. It is expected that SWM’s directors and executive officers will vote their shares “FOR” the SWM share issuance proposal and “FOR” the SWM adjournment proposal. As of the SWM record date, Neenah, the directors and officers of Neenah and their affiliates beneficially owned no shares of SWM common stock outstanding on that date.

Voting of Proxies

Each copy of this joint proxy statement/prospectus mailed to SWM stockholders is accompanied by a form of proxy card with instructions for voting. If you hold shares in your name as a stockholder of record, you should complete and return the proxy card accompanying this joint proxy statement/prospectus, regardless of whether you plan to attend the SWM special meeting in person (via the Internet).

The procedures for voting by proxy are as follows:

SWM Stockholder of Record: Shares Registered in Your Name

If you are an SWM stockholder of record, you may vote in person (via the Internet) at the SWM special meeting. Alternatively, you may vote by proxy over the Internet, by telephone or by mail. Whether or not you plan to attend the SWM special meeting in person (via the Internet), we urge you to vote by proxy to ensure your vote is counted. Even if you have submitted a proxy before the SWM special meeting, you may still attend the SWM special meeting and vote in person (via the Internet). In such case, your previously submitted proxy will be disregarded. To enter the SWM special meeting, SWM stockholders will need the control number that

 

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is printed on their proxy cards. In order to attend the virtual meeting, you will need to pre-register by 8:00 a.m. Eastern Time on June 28, 2022 by visiting the website www.cesonlineservices.com/swm22_vm. SWM recommends that SWM stockholders log in at least fifteen minutes before the meeting to ensure that they are logged in when the meeting starts. Online check-in will start shortly before the meeting on June 29, 2022.

 

   

To vote by proxy over the Internet, follow the instructions provided on the proxy card.

 

   

To vote by proxy by telephone, call the toll-free number found on the proxy card.

 

   

To vote by proxy by mail, complete, sign and date the proxy card, and return it promptly in the envelope provided. If you return your signed proxy card to SWM before the SWM special meeting, SWM will vote your shares as you direct.

All shares represented by valid proxies that SWM receives through this solicitation, and that are not revoked, will be voted in accordance with your instructions on the proxy card. If you make no specification on your proxy card as to how you want your shares voted before signing and returning it, your proxy will be voted in accordance with the recommendation of the SWM board of directors with respect to such proposals. No matters other than the matters described in this joint proxy statement/prospectus are anticipated to be presented for action at the special meeting or at any adjournment or postponement of the SWM special meeting. However, if other business properly comes before the SWM special meeting, the proxy agents will, in their discretion, vote upon such matters in their best judgment.

Beneficial Owner: Shares Registered in the Name of Brokers, Banks or Other Nominees

If you are a beneficial owner of SWM shares registered in the name of your broker, bank or other nominee, you should have received a voting instruction card and voting instructions with these proxy materials from that organization rather than from us. Return the voting instructions as provided therein to ensure that your vote is counted. To vote in person (via the Internet) at the SWM special meeting, you must obtain a legal proxy from your broker, bank or other nominee. Follow the instructions from your broker, bank or other nominee included with these proxy materials, or contact your broker, bank or other nominee to request a proxy form.

Shares Held in “Street Name”; Broker Non-Votes

Under NYSE rules, banks, brokers and other nominees who hold shares of SWM common stock in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, banks, brokers and other nominees are not allowed to exercise their voting discretion with respect to the approval of matters determined to be “non-routine,” without specific instructions from the beneficial owner. If your broker, bank or other nominee holds your shares of SWM common stock in “street name,” your broker, bank or other nominee will vote your shares of SWM common stock only if you provide instructions on how to vote by filling out the voter instruction form sent to you by your broker, bank or other nominee with this joint proxy statement/prospectus.

Broker non-votes with respect to any proposal are shares held by a broker, bank or other nominee that are represented at the SWM special meeting because they are entitled to vote on at least one proposal, but with respect to which the broker or nominee does not have voting instructions from the beneficial owner or discretionary authority to vote on such specific proposal. Because it is expected that all proposals to be voted on at the SWM special meeting will be “non-routine” matters, it is unlikely that there will be any broker non-votes at the SWM special meeting. Broker non-votes, if any, will have no effect on any of the SWM proposals.

Revocability of Proxies and Changes to an SWM Stockholder’s Vote

If you hold your shares of SWM common stock in your name as a stockholder of record, you may revoke any proxy at any time before it is voted by (i) submitting another properly completed proxy over the Internet, by telephone or by mail with a later date, (ii) delivering a written revocation letter to SWM’s Secretary prior to the vote at the address below or (iii) attending the SWM special meeting in person (via the Internet) and voting by online ballot at such meeting.

 

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Any stockholder entitled to vote in person (via the Internet) at the SWM special meeting may vote online regardless of whether a proxy has been previously given, but the mere presence (without notifying SWM’s Secretary) of a stockholder at the SWM special meeting will not by itself constitute revocation of a previously given proxy.

Written notices of revocation and other communications about revoking your proxy should be addressed to:

Schweitzer-Mauduit International, Inc.

100 North Point Center East, Suite 600

Alpharetta, GA 30022

Attention: Executive Vice President, General Counsel and Secretary

If your shares of SWM common stock are held in “street name” by a broker, bank or other nominee, you should follow the instructions of your broker, bank or other nominee regarding the revocation of proxies.

Solicitation of Proxies

SWM is soliciting your proxy in conjunction with the merger. SWM will bear the cost of soliciting proxies from you. In addition to solicitation of proxies by mail, SWM will request that banks, brokers, nominees and any other holder of record send proxies and proxy material to the beneficial owners of SWM common stock and secure their voting instructions. SWM has also made arrangements with MacKenzie Partners, Inc. to assist it in soliciting proxies and has agreed to pay MacKenzie Partners, Inc. approximately $25,000 plus reasonable expenses for these services.

Householding of Proxy Materials

The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy materials, including annual reports, with respect to two (2) or more stockholders sharing the same address by delivering a single copy of the documents addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies. In accordance with these rules, only one set of documents will be delivered to multiple stockholders sharing an address unless SWM has received contrary instructions from one or more of the stockholders.

If, at any time, you no longer wish to participate in “householding” and would prefer to receive separate copies of the proxy materials with respect to SWM, including annual reports, please notify your broker, and direct your written request to: Secretary, Schweitzer-Mauduit International, Inc., 100 North Point Center East, Suite 600, Alpharetta, Georgia 30022, or contact the office of SWM’s Secretary at (866) 528-2593. SWM stockholders who currently receive multiple copies of such documents and would like to request “householding” of their communications should contact their brokers.

Attending the SWM Special Meeting in Person (via the Internet)

All SWM stockholders, including holders of record and stockholders who hold their shares through banks, brokers, nominees or any other holder of record, are invited to attend the SWM special meeting in person (via the Internet). SWM stockholders of record can vote at the SWM special meeting in person (via the Internet). If you are not an SWM stockholder of record, you must obtain a proxy executed in your favor from the record holder of your shares, such as a broker, bank or other nominee, to be able to vote at the SWM special meeting in person (via the Internet).

To enter the SWM special meeting, SWM stockholders will need the control number that is printed on their proxy cards. In order to attend the virtual meeting, you will need to pre-register by 8:00 a.m. Eastern Time

 

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on June 28, 2022 by visiting the website www.cesonlineservices.com/swm22_vm. SWM recommends that SWM stockholders log in at least fifteen minutes before the meeting to ensure that they are logged in when the meeting starts. Online check-in will start shortly before the meeting on June 29, 2022.

Assistance

If you have any questions concerning the merger or this joint proxy statement/prospectus, would like additional copies of this joint proxy statement/prospectus or need help voting your shares of SWM common stock, please direct your inquiry to SWM’s proxy solicitor as follows:

MacKenzie Partners, Inc.

1407 Broadway, 27th Floor

New York, New York 10018

Call Toll-Free: 1-800-322-2885

Email: [email protected]

 

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SWM PROPOSALS

Proposal No. 1—SWM Share Issuance Proposal

At the SWM special meeting, the SWM stockholders will be asked to approve the issuance of shares of SWM common stock, pursuant to the terms of the merger agreement, in an amount necessary to complete the merger and the other transactions contemplated by the merger agreement. SWM stockholders should read this joint proxy statement/prospectus carefully and in its entirety, including the annexes, for more detailed information concerning the merger agreement and the merger. A copy of the merger agreement is attached to this joint proxy statement/prospectus as Annex A.

After careful consideration, the SWM board of directors unanimously adopted the merger agreement, authorized and approved the merger and the other transactions contemplated by the merger agreement and determined the merger agreement and the merger to be advisable and in the best interests of SWM and its stockholders. Please see “The Merger—SWM’s Reasons for the Merger; Recommendation of SWM’s Board of Directors” beginning on page 80 for a more detailed discussion of the SWM board of directors’ recommendation.

The SWM board of directors unanimously recommends that SWM stockholders vote “FOR” the SWM share issuance proposal.

Proposal No. 2—SWM Adjournment Proposal

The SWM special meeting may be adjourned from time to time to another time or place, if the chairperson of the meeting deems necessary or appropriate, including to permit further solicitation of proxies if necessary to obtain additional votes in favor of the SWM share issuance proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to SWM stockholders.

If, at the SWM special meeting, (i) there are insufficient shares of SWM common stock represented (either in person (via the Internet) or by proxy) to constitute a quorum necessary to conduct the business of such meeting, (ii) additional time is required for the filing and mailing of any supplemental or amended disclosure which SWM has determined is reasonably likely to be required under applicable law and for such supplemental or amended disclosure to be disseminated and reviewed by SWM stockholders prior to the meeting of SWM stockholders, (iii) to allow reasonable additional time to solicit additional proxies, if and to the extent SWM reasonably believes the number of shares of SWM common stock present or represented and voting in favor of the SWM share issuance proposal is insufficient to approve such proposal or (iv) if required by law, SWM intends to move to adjourn the SWM special meeting. In accordance with SWM’s bylaws, a vote to approve the proposal to adjourn the SWM special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the SWM special meeting to adopt the SWM share issuance proposal may be taken in the absence of a quorum.

The SWM board of directors unanimously recommends that SWM stockholders vote “FOR” the SWM adjournment proposal.

 

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THE NEENAH SPECIAL MEETING

Date, Time and Place of Meeting

The Neenah special meeting will be held virtually via live webcast on the Internet at www.virtualshareholdermeeting.com/NP2022SM, on June 29, 2022, at 9:00 a.m. Eastern Time.

Matters to Be Considered

At the Neenah special meeting, Neenah stockholders will be asked to consider and vote upon the following matters:

 

   

the Neenah merger proposal;

 

   

the Neenah compensation proposal; and

 

   

the Neenah adjournment proposal.

Recommendation of the Neenah Board of Directors

The Neenah board of directors has (i) determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable, fair to and in the best interests of Neenah and its stockholders, (ii) approved and adopted the merger agreement and the execution, delivery and performance by Neenah of the merger agreement and the transactions contemplated thereby, including the merger, and (iii) recommended that Neenah’s stockholders approve the merger proposal. The Neenah board of directors unanimously recommends that Neenah stockholders vote “FOR” the Neenah merger proposal, “FOR” the Neenah compensation proposal, and “FOR” the Neenah adjournment proposal. See “The Merger— Neenah’s Reasons for the Merger; Recommendation of Neenah’s Board of Directors” beginning on page 92 for a more detailed discussion of the Neenah board of directors’ recommendation.

Neenah Record Date and Quorum

The Neenah board of directors has fixed the close of business on May 20, 2022, as the record date for determining the Neenah stockholders entitled to receive notice of and to vote at the Neenah special meeting and any adjournment or postponement thereof.

As of the Neenah record date, there were 16,789,184 shares of Neenah common stock outstanding and entitled to vote at the Neenah special meeting held by approximately 955 holders of record. Each share of Neenah common stock entitles the holder to one (1) vote at the Neenah special meeting on each proposal to be considered at the Neenah special meeting.

The presence at the Neenah special meeting, in person (via the Internet) or by proxy, of holders of a majority of the voting power of the Neenah common stock issued and outstanding and entitled to vote will constitute a quorum for the transaction of business. All shares of Neenah common stock present in person (via the Internet) or represented by proxy, including abstentions, will be treated as present for purposes of determining the presence or absence of a quorum for all matters voted on at the Neenah special meeting.

Votes Required; Effect of Abstentions and Failure to Vote

Neenah merger proposal:

 

   

Vote required: Approval of the Neenah merger proposal requires the affirmative vote of the holders of two-thirds of the outstanding shares of Neenah common stock entitled to vote on the Neenah merger proposal.

 

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Effect of abstentions and failure to vote: If you attend the Neenah special meeting in person (via the Internet) and do not vote or if you submit a proxy card on which you indicate that you abstain from voting, your abstention will have the same effect as a vote “AGAINST” the Neenah merger proposal.

If you are a Neenah stockholder entitled to vote at the Neenah special meeting and you do not attend the Neenah special meeting in person (via the Internet) or return a proxy, your shares will not be voted and will not be treated as present for purposes of establishing a quorum, and such a failure to vote will have the effect of a vote “AGAINST” the Neenah merger proposal.

Because it is expected that all proposals to be voted on at the Neenah special meeting will be “non-routine” matters, it is unlikely that there will be any broker non-votes at the Neenah special meeting.

Neenah compensation proposal:

 

   

Vote required: Approval of the Neenah compensation proposal requires the affirmative vote of the holders of a majority in voting power of the shares of Neenah common stock which are present in person (via the Internet) or by proxy at the Neenah special meeting and entitled to vote on the Neenah compensation proposal; however, such vote is non-binding and advisory only.

 

   

Effect of abstentions and failure to vote: If you attend the Neenah special meeting in person (via the Internet) and do not vote or if you submit a proxy card on which you indicate that you abstain from voting, your abstention will have the same effect as a vote “AGAINST” the Neenah compensation proposal.

If you are a Neenah stockholder entitled to vote at the Neenah special meeting and you do not attend the Neenah special meeting in person (via the Internet) or return a proxy, your shares will not be voted, will not be treated as present for purposes of establishing a quorum and, assuming a quorum is present, this will have no effect on the Neenah compensation proposal.

Because it is expected that all proposals to be voted on at the Neenah special meeting will be “non-routine” matters, it is unlikely that there will be any broker non-votes at the Neenah special meeting.

Neenah adjournment proposal:

 

   

Vote required: Approval of the Neenah adjournment proposal requires the affirmative vote of the holders of a majority in voting power of the shares of Neenah common stock which are present in person (via the Internet) or represented by proxy at the Neenah special meeting and entitled to vote on the Neenah adjournment proposal.

 

   

Effect of abstentions and failure to vote: If you attend the Neenah special meeting in person (via the Internet) and do not vote or if you submit a proxy card on which you indicate that you abstain from voting, this will have the effect of a vote “AGAINST” the Neenah adjournment proposal.

If you are a Neenah stockholder entitled to vote at the Neenah special meeting and you do not attend the Neenah special meeting in person (via the Internet) or return a proxy, your shares will not be voted, will not be treated as present for purposes of establishing a quorum and, assuming a quorum is present, this will have no effect on the Neenah adjournment proposal.

Because it is expected that all proposals to be voted on at the Neenah special meeting will be “non-routine” matters, it is unlikely that there will be any broker non-votes at the Neenah special meeting.

 

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Shares Held by Officers and Directors

As of the Neenah record date, the directors and executive officers of Neenah and their affiliates beneficially owned and were entitled to vote approximately 80,788 shares of Neenah common stock representing approximately 0.5% of the shares of Neenah common stock outstanding on that date. It is expected that Neenah’s directors and executive officers will vote their shares “FOR” the Neenah merger proposal, “FOR” the Neenah compensation proposal and “FOR” the Neenah adjournment proposal. As of the Neenah record date, SWM, the directors and officers of SWM and their affiliates beneficially owned no shares of Neenah common stock outstanding on that date.

Voting of Proxies

Each copy of this joint proxy statement/prospectus mailed to Neenah stockholders is accompanied by a form of proxy card with instructions for voting. If you hold shares in your name as a stockholder of record, you should complete and return the proxy card accompanying this joint proxy statement/prospectus, regardless of whether you plan to attend the Neenah special meeting in person (via the Internet).

The procedures for voting by proxy are as follows:

Neenah Stockholder of Record: Shares Registered in Your Name

If you are a Neenah stockholder of record, you may vote in person (via the Internet) at the Neenah special meeting. by visiting www.virtualshareholdermeeting.com/NP2022SM and using the 16-digit control number found on your proxy card. Neenah recommends that Neenah stockholders log in at least fifteen minutes before the special meeting begins to ensure that they are logged in when the meeting starts. Online check-in will start shortly before the meeting on June 29, 2022.

Alternatively, you may vote by proxy over the Internet, by telephone or by mail. Whether or not you plan to attend the Neenah special meeting in person (via the Internet), we urge you to vote by proxy to ensure your vote is counted. Even if you have submitted a proxy before the Neenah special meeting, you may still attend the Neenah special meeting and vote in person (via the Internet). In such case, your previously submitted proxy will be disregarded.

 

   

To vote by proxy over the Internet, follow the instructions provided on the proxy card.

 

   

To vote by proxy by telephone, call the toll-free number found on the proxy card.

 

   

To vote by proxy by mail, complete, sign and date the proxy card, and return it promptly in the envelope provided. If you return your signed proxy card to Neenah before the Neenah special meeting, the proxyholder will vote your shares as you direct.

Beneficial Owner: Shares Registered in the Name of Brokers, Banks or Other Nominees

If you are a beneficial owner of Neenah shares registered in the name of your broker, bank or other nominee, you should have received a voting instruction card and voting instructions with these proxy materials from that organization rather than from us. Return the voting instructions as provided therein to ensure that your vote is counted. To vote at the Neenah special meeting in person (via the Internet), you must obtain a legal proxy from your broker, bank or other nominee. Follow the instructions from your broker, bank or other nominee included with these proxy materials, or contact your broker, bank or other nominee to request a proxy form.

All shares represented by valid proxies that Neenah receives through this solicitation, and that are not revoked, will be voted in accordance with your instructions on the proxy card. If you make no specification on your proxy card as to how you want your shares voted before signing and returning it, your proxy will be voted in accordance with the recommendation of the Neenah board of directors with respect to such proposals. No matters

 

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other than the matters described in this joint proxy statement/prospectus are anticipated to be presented for action at the Neenah special meeting or at any adjournment or postponement of the Neenah special meeting. However, if other business properly comes before the Neenah special meeting, the proxy agents will, in their discretion, vote upon such matters in their best judgment.

Shares Held in “Street Name”; Broker Non-Votes

Under NYSE rules, banks, brokers and other nominees who hold shares of Neenah common stock in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, banks, brokers and other nominees are not allowed to exercise their voting discretion with respect to the approval of matters determined to be “non-routine,” without specific instructions from the beneficial owner. If your broker, bank or other nominee holds your shares of Neenah common stock in “street name,” your broker, bank or other nominee will vote your shares of Neenah common stock only if you provide instructions on how to vote by filling out the voter instruction form sent to you by your broker, bank or other nominee with this joint proxy statement/prospectus.

Broker non-votes with respect to any proposal are shares held by a broker, bank or other nominee that are represented at the Neenah special meeting because they are entitled to vote on at least one proposal, but with respect to which the broker or nominee does not have voting instructions from the beneficial owner or discretionary authority to vote on such specific proposal. Because it is expected that all proposals to be voted on at the Neenah special meeting will be “non-routine” matters, it is unlikely that there will be any broker non-votes at the Neenah special meeting, and broker non-votes, if any, will have no effect on any of the Neenah proposals.

Revocability of Proxies and Changes to a Neenah Stockholder’s Vote

If you hold your shares of Neenah common stock in your name as a stockholder of record, you may revoke any proxy at any time before it is voted by (i) submitting another properly completed proxy over the Internet, by telephone or by mail with a later date, (ii) delivering a written revocation letter to Neenah’s Secretary prior to the vote at the address below or (iii) attending the Neenah special meeting in person (via the Internet) and voting by ballot online.

Any Neenah stockholder entitled to vote at the Neenah special meeting in person (via the Internet) may vote online regardless of whether a proxy has been previously given, but the mere presence (without notifying Neenah’s Secretary) of a stockholder at the Neenah special meeting will not by itself constitute revocation of a previously given proxy.

Written notices of revocation and other communications about revoking your proxy card should be addressed to:

Neenah, Inc.

3460 Preston Ridge Road, Suite 600

Alpharetta, Georgia 30005

Attention: Executive Vice President, General Counsel and Secretary

If your shares of Neenah common stock are held in “street name” by a broker, bank or other nominee, you should follow the instructions of your broker, bank or other nominee regarding the revocation of proxies.

Solicitation of Proxies

Neenah is soliciting your proxy in conjunction with the merger. Neenah will bear the cost of soliciting proxies from you. In addition to solicitation of proxies by mail, Neenah will request that banks, brokers, nominees and any other Neenah stockholders of record send proxies and proxy material to the beneficial owners of Neenah common stock and secure their voting instructions. Neenah has also made arrangements with Okapi Partners

 

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LLC, to assist it in soliciting proxies and has agreed to pay Okapi Partners LLC approximately $20,000 plus reasonable expenses for these services.

Householding of Proxy Materials

The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy materials, including annual reports, with respect to two or more stockholders sharing the same address by delivering a single copy of the documents addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies. In accordance with these rules, only one set of documents will be delivered to multiple stockholders sharing an address unless Neenah has received contrary instructions from one or more of the stockholders.

If, at any time, you no longer wish to participate in “householding” and would prefer to receive separate copies of the proxy materials with respect to Neenah, including annual reports, please notify your broker and direct your written request to: Investor Relations, Neenah, Inc., 3460 Preston Ridge Road, Suite 600, Alpharetta, Georgia, 30005, or contact the office of Neenah’s Secretary at (678) 566-6500. Neenah stockholders who currently receive multiple copies of such documents and would like to request “householding” of their communications should contact their brokers.

Attending the Neenah Special Meeting in Person (via the Internet)

All Neenah stockholders, including holders of record and Neenah stockholders who hold their shares through banks, brokers, nominees or any other holder of record, are invited to attend the Neenah special meeting in person (via the Internet). Neenah stockholders of record can vote at the Neenah special meeting in person (via the Internet) by visiting www.virtualshareholdermeeting.com/NP2022SM and using the 16-digit control number found on their proxy card. If you are not a Neenah stockholder of record, you must obtain a proxy executed in your favor from the record holder of your shares, such as a broker, bank or other nominee, to be able to vote at the Neenah special meeting in person (via the Internet).

Neenah recommends that Neenah stockholders log in at least fifteen minutes before the meeting to ensure that they are logged in when the meeting starts. Online check-in will start shortly before the meeting on June 29, 2022.

Assistance

If you have any questions concerning the merger or this joint proxy statement/prospectus, would like additional copies of this joint proxy statement/prospectus, or need help voting your shares of Neenah common stock, please direct your inquiry to Neenah’s proxy solicitor as follows:

Okapi Partners LLC

1212 Avenue of the Americas, 24th Floor

New York, NY 10036

Call Toll-Free: 877-259-6290

Banks and Brokerage Firms Call: (212) 297-0720

Email: [email protected]

 

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NEENAH PROPOSALS

Proposal No. 1—Neenah Merger Proposal

At the Neenah special meeting, the Neenah stockholders will be asked to approve and adopt the merger agreement and the transactions contemplated thereby, including the merger. Neenah stockholders should read this joint proxy statement/prospectus carefully and in its entirety, including the annexes, for more detailed information concerning the merger agreement and the merger. A copy of the merger agreement is attached to this joint proxy statement/prospectus as Annex A.

After careful consideration, the Neenah board of directors unanimously (i) determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable, fair to and in the best interests of Neenah and its stockholders, (ii) approved and adopted the merger agreement and the execution, delivery and performance by Neenah of the merger agreement and the transactions contemplated thereby, including the merger, and (iii) recommended that Neenah’s stockholders approve the merger proposal. Please see “The Merger—Neenah’s Reasons for the Merger; Recommendation of Neenah’s Board of Directors” beginning on page 92 for a more detailed discussion of the Neenah board of directors’ recommendation.

The Neenah board of directors unanimously recommends that Neenah stockholders vote “FOR” the Neenah merger proposal.

Proposal No. 2—Neenah Compensation Proposal

Section 14A of the Exchange Act and Rule 14a-21(c) under the Exchange Act requires Neenah to seek a nonbinding advisory vote from its stockholders to approve the “golden parachute” compensation that may be paid or become payable to Neenah’s named executive officers that is based on or otherwise relates to the merger, as disclosed in “The Merger—Neenah’s Reasons for the Merger; Recommendation of Neenah’s Board of Directors” beginning on page 92, including the table titled “Merger-Related Compensation for Neenah’s Named Executive Officers” and its accompanying footnotes. As required by these provisions, Neenah is asking the Neenah stockholders to cast an advisory vote on the adoption of the following resolution:

“RESOLVED, that the compensation that may be paid or become payable to Neenah’s named executive officers that is based on or otherwise relates to the merger, and the agreements or understandings pursuant to which such compensation may be paid or become payable, in each case, as disclosed pursuant to Item 402(t) of Regulation S-K in “The Merger—Interests of Neenah’s Directors and Executive Officers in the Merger” and “The Merger—Merger-Related Compensation for Neenah’s Named Executive Officers” beginning on pages 92 and 114, respectively, are hereby APPROVED.”

The vote on the Neenah compensation proposal is an advisory vote and will not be binding on Neenah, Neenah’s board of directors, SWM, any of Neenah or SWM’s subsidiaries or the combined company. Therefore, regardless of whether Neenah stockholders approve the Neenah compensation proposal, if the Neenah merger proposal is approved by the Neenah stockholders and the merger is completed, the compensation that may be paid or become payable to Neenah’s named executive officers that is based on or otherwise related to the merger will still be paid to such officers in accordance with the terms of their compensation agreements and arrangements. Approval of the Neenah compensation proposal is not a condition to the closing of the merger.

The Neenah board of directors unanimously recommends that Neenah stockholders vote “FOR” the Neenah compensation proposal.

Proposal No. 3 — Neenah Adjournment Proposal

The Neenah special meeting may be adjourned from time to time to another time or place, if the chairperson of the meeting determines necessary or appropriate, to permit, among other things, further solicitation of proxies if

 

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necessary to obtain additional votes in favor of the Neenah merger proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to Neenah stockholders.

If, at the Neenah special meeting, (i) there are insufficient shares of Neenah common stock represented (either in person (via the Internet) or by proxy) to constitute a quorum necessary to conduct the business of such meeting, (ii) additional time is required for the filing and mailing of any supplemental or amended disclosure which Neenah has determined is reasonably likely to be required under applicable law and for such supplemental or amended disclosure to be disseminated and reviewed by Neenah stockholders prior to the special meeting of Neenah stockholders, (iii) to allow reasonable additional time to solicit additional proxies, if and to the extent Neenah reasonably believes the number of shares of Neenah common stock present or represented and voting in favor of the Neenah merger proposal is insufficient to approve such proposal or (iv) if required by law, Neenah intends to move to adjourn the Neenah special meeting. In accordance with Neenah’s bylaws, a vote to approve the proposal to adjourn the Neenah special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Neenah special meeting to adopt the Neenah merger proposal may be taken in the absence of a quorum.

The Neenah board of directors unanimously recommends that Neenah stockholders vote “FOR” the Neenah adjournment proposal.

 

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THE MERGER

This section of the joint proxy statement/prospectus describes material aspects of the merger. This summary may not contain all of the information that is important to you. You should carefully read this entire joint proxy statement/prospectus and the other documents attached to or incorporated by reference for a more complete understanding of the merger and the merger agreement. In addition, we incorporate important business and financial information about each of SWM and Neenah into this joint proxy statement/prospectus by reference. You may obtain the information incorporated by reference into this joint proxy statement/prospectus without charge by following the instructions in the section entitled “Where You Can Find More Information” beginning on page 188.

Terms of the Merger

Each of the SWM and Neenah boards of directors has unanimously adopted and approved the merger agreement. The merger agreement provides that SWM and Neenah will combine their companies in a merger of equals, structured as a merger of Merger Sub with and into Neenah, with Neenah as the surviving corporation and a wholly owned subsidiary of SWM.

In the merger, each share of Neenah common stock issued and outstanding immediately prior to the effective time (other than certain shares owned by SWM or any of its wholly owned subsidiaries, including Merger Sub, or Neenah or any of its wholly owned subsidiaries) will be converted into the right to receive 1.358 shares of SWM common stock. No fractional shares of SWM common stock will be issued in connection with the merger, and Neenah stockholders will be entitled to receive cash in lieu thereof.

SWM stockholders are being asked to approve the issuance of SWM common stock as the merger consideration in the merger, and Neenah stockholders are being asked to approve the merger agreement, the merger and the other transactions contemplated thereby. See the section entitled “The Merger Agreement” beginning on page 128 for additional and more detailed information regarding the legal documents that govern the merger, including information about the conditions to the completion of the merger and the provisions for terminating or amending the merger agreement.

Background of the Merger

The respective boards of directors of each of SWM and Neenah, together with their respective management teams, regularly review and assess the performance, strategy, competitive position, opportunities and prospects of their respective companies in light of the then-current business, economic and regulatory environments, as well as developments in the specialty products and other industries in which each company operates, in each case with the goal of enhancing long-term value for their respective stockholders. These reviews conducted by each company have included periodic consideration and discussion of potential strategic alternatives, including whether such company should continue to execute on its strategy as a stand-alone company; pursue various dispositions, acquisitions, business combinations or joint ventures; or seek to improve its capital structure, which could include deleveraging. As part of these reviews, the Chief Executive Officer of each company engages, from time to time, in informal discussions with key representatives of other companies regarding trends and developments, and, on occasion, strategic alternatives available to such company, including potential business combinations and other strategic transactions.

As a result of each company’s commitment to periodically evaluating strategic alternatives, during July and August 2019, John O’Donnell, the President and Chief Executive Officer of Neenah at that time, and Dr. Jeff Kramer, the Chief Executive Officer of SWM, engaged in preliminary discussions regarding possible strategic advantages in working together to gauge each company’s interest in pursuing a potential business combination or other strategic transaction with the other company. To facilitate that discussion, on August 13, 2019, Neenah and SWM entered into a mutual non-disclosure agreement as part of preliminary discussions regarding the exploration of a potential transaction, but no confidential information was exchanged between the parties at that

 

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time. While these preliminary discussions did not result in any specific proposal for a strategic transaction, Neenah and SWM determined that the potential strategic opportunities between the parties warranted a review with their respective boards. The preliminary discussions were reviewed by Neenah at a regular meeting of the Neenah board of directors on August 14-15, 2019, and by SWM at a meeting of the SWM board of directors on August 16, 2019. After reviewing and discussing the state of the industry at the time and potential strategic alternatives then-available to Neenah, the Neenah board of directors determined not to move forward with the commencement of due diligence or negotiation of potential transaction terms at that time, and that Neenah should instead continue to focus on executing on its then-current strategy and operating as an independent, stand-alone company.

Following these preliminary discussions, both SWM and Neenah continued to focus on executing their respective stand-alone strategic plans, including the review and execution of strategic acquisitions.

On February 1, 2020, Neenah announced that it had entered into a definitive agreement to acquire Vectorply Corporation, a composites media manufacturing company based in the United States. Neenah ultimately did not consummate that proposed transaction based on a number of considerations, including those related to the uncertainty of global markets at the beginning of the COVID-19 pandemic.

On February 11, 2020, Neenah announced that Ms. Schertell was appointed as the Chief Executive Officer of Neenah effective May 21, 2020.

On March 13, 2020, SWM acquired Tekra, LLC and Trient, LLC, converters of high-performance films and substrates based in the United States.

On April 6, 2021, Neenah acquired Global Release Liners, S.L., the parent company of Industrias de Transformación de Andoain, S.A., a manufacturer of release liner media headquartered in Spain, with additional operations in Mexico and Malaysia.

On April 15, 2021, SWM acquired Scapa Group Plc (which we refer to as “Scapa”), a UK-based innovation, design and manufacturing solutions provider for healthcare and industrial markets.

In August 2021, Dr. Kramer contacted Ms. Schertell to schedule an in-person introductory meeting to be held on September 3, 2021, as Dr. Kramer and Ms. Schertell had not met since Ms. Schertell was appointed as the Chief Executive Officer of Neenah. Prior to the meeting and to ensure that she had the relevant background regarding Neenah’s past interactions with SWM, on August 27, 2021, Ms. Schertell contacted Perella Weinberg to discuss the history of the interactions and discussions between Mr. O’Donnell and Dr. Kramer.

On September 3, 2021, Ms. Schertell and Dr. Kramer attended the scheduled in-person meeting, at which they discussed general industry conditions, each company’s ongoing business performance, as well as the prior CEO to CEO discussions in 2019 regarding a potential transaction. At this meeting, both Dr. Kramer and Ms. Schertell expressed that their respective company was focused on executing its respective strategy as an independent, stand-alone company, but that the board of directors of each company regularly reviews and assesses strategic alternatives that could enhance stockholder value and may be interested in exploring a potential combination of SWM and Neenah. No definitive terms of a proposed transaction were discussed during this meeting.

Following the September 3, 2021, meeting, Dr. Kramer updated SWM’s non-executive chair, Dr. John D. Rogers, on his discussion with Ms. Schertell. Dr. Kramer noted to Dr. Rogers that SWM should continue to execute its current strategy and operate as an independent company, but should also evaluate a potential business combination transaction with Neenah. Dr. Rogers expressed preliminary support for continued, exploratory discussions with Neenah.

Following the September 3, 2021, meeting, Ms. Schertell updated Neenah’s non-executive chair, William Cook, on her discussion with Dr. Kramer. Mr. Cook noted to Ms. Schertell the general view of the Neenah board of

 

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directors that Neenah should continue to focus on its current strategy as an independent stand-alone company, but that Neenah should also continue to evaluate strategic alternatives that could enhance stockholder value, including a possible combination of SWM and Neenah.

On September 22, 2021, Dr. Kramer and Ms. Schertell held a telephone call to further discuss each company’s ongoing business performance and the strategic merits of a potential combination of SWM and Neenah so that each could provide additional information to its board of directors.

On September 23, 2021, the SWM board of directors held a meeting with members of SWM’s senior management. During an executive session of the meeting, Dr. Kramer reported to the SWM board of directors the discussions he had with Ms. Schertell regarding a potential combination of SWM and Neenah. The SWM board of directors discussed the potential combination, including its potential risks and benefits, in addition to other strategic alternatives. The SWM board of directors also discussed SWM’s strategy as an independent, stand-alone company and confirmed its continued confidence in SWM’s strategy as an independent, stand-alone company and the value creation anticipated therefrom for SWM and its stockholders. Following discussion, the SWM board of directors directed Dr. Kramer to continue to engage in discussions with Ms. Schertell and proceed with an evaluation of the benefits and risks of a potential combination of SWM and Neenah so that the SWM board of directors could further assess the transaction.

On September 24, 2021, the Neenah board of directors held a telephone call with members of Neenah’s senior management. During the call, Ms. Schertell discussed with the Neenah board of directors the discussions she had with Dr. Kramer regarding a potential combination of SWM and Neenah. The Neenah board of directors discussed the potential combination, including its potential risks and benefits, in addition to other strategic alternatives. With respect to the potential combination, among the factors considered by the Neenah board of directors were the potentially complementary businesses, the potential for synergies and the potential for benefits related to increased scale and a strengthened financial profile. The Neenah board of directors also discussed Neenah’s strategy as an independent, stand-alone company and confirmed its continued confidence in Neenah’s strategy as an independent, stand-alone company and the value creation anticipated therefrom for Neenah and its stockholders. As part of this discussion, Neenah’s independent directors acknowledged the progress they felt Neenah’s management had been making in executing Neenah’s strategic plan and setting up the company for long-term success, and expressed their view that, if the two companies ultimately determined to move forward with the potential combination, Ms. Schertell should likely continue to play an integral role as Chief Executive Officer of the combined company, given their confidence in Ms. Schertell and her ability to unlock the potential benefits of the potential combination. However, Neenah’s independent directors also determined that Neenah should focus on its diligence evaluation of SWM and the potential synergies and benefits associated with a combination with SWM, and that the Chief Executive Officer role and other governance aspects of the combined company should be considered by the Neenah board of directors once it had a better understanding of a potential combination of SWM and Neenah. Following discussion, the Neenah board of directors directed Ms. Schertell to continue to engage in discussions with Dr. Kramer and proceed with an evaluation of the benefits and risks of a potential combination of SWM and Neenah so that the Neenah board of directors could further assess the transaction.

On October 29, 2021, the Neenah board of directors held a telephone call with members of Neenah’s senior management. During the call, the Neenah board of directors again discussed the meetings and calls between Ms. Schertell and Dr. Kramer and the potential combination of SWM and Neenah, including strategic rationale and potential acceleration of growth.

On November 5, 2021, Dr. Kramer and Ms. Schertell held a telephone call to discuss both parties’ initial reflections on the potential combination of SWM and Neenah and potential next steps for the evaluation of the potential combination. As part of this discussion, Dr. Kramer and Ms. Schertell agreed that a thorough evaluation

 

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of the industrial logic, strategic fit and synergy potential of a combination of Neenah and SWM, as well as the costs of achieving such synergies, must be a key next step as part of each of SWM’s and Neenah’s evaluation of a potential transaction.

In early November, each of Neenah and SWM internally discussed the possibility of conducting an evaluation of each company’s business and the potential combination through each company sharing nonpublic information with third party advisors (rather than directly with the other party) in a “clean room” diligence exercise (which we refer to as the “clean room diligence evaluation”), subject to approval by each company’s board of directors.

Between September and November 2021, Dr. Kramer provided Dr. Rogers with additional updates on the discussions Dr. Kramer had with Ms. Schertell regarding a potential business combination transaction with Neenah. Dr. Rogers continued to express preliminary support for continued exploratory discussions and also encouraged Dr. Kramer to engage external advisors at the appropriate time to allow SWM to evaluate a potential transaction. During such time, SWM’s senior management also began preparing for the continued evaluation of a potential business combination transaction, including gathering internal diligence information, assessing area of focus for the potential clean room diligence evaluation, evaluating possible financial and legal advisors and discussing potential transaction structures for such a combination.

On November 16-18, 2021, the Neenah board of directors held a regularly scheduled meeting. Representatives of Neenah’s legal counsel, Bryan Cave Leighton Paisner LLP (which we refer to as “BCLP”), were in attendance. Representatives of Perella Weinberg, which had acted as Neenah’s financial advisor in connection with its prior acquisition of Global Release Liners, S.L. and were familiar with Neenah’s business and strategies, as well as Mr. O’Donnell’s preliminary discussions with Dr. Kramer in 2019, were also in attendance as part of an annual review of Neenah’s long-term financials and strategic alternatives. At the meeting, Ms. Schertell reported to the Neenah board of directors on the latest discussions she had with Dr. Kramer regarding a potential combination of SWM and Neenah. Representatives of Perella Weinberg discussed their preliminary financial perspectives regarding Neenah, and the risks, opportunities and alternatives specific to Neenah’s long-term strategy. Further, at the request of Ms. Schertell, representatives of Perella Weinberg discussed potential strategic alternatives which could be available to Neenah, including a potential business combination with SWM and continuing to focus on executing management’s current strategy and operating as an independent, stand-alone company. Following the discussion, the Neenah board of directors directed Ms. Schertell to continue to engage in initial discussions with Dr. Kramer to finalize a path forward for an evaluation of a potential combination of SWM and Neenah, in order to assess the industrial logic, strategic fit and synergy potential of the potential combination of Neenah and SWM and to also engage in the clean room diligence evaluation. The Neenah board of directors also directed Ms. Schertell to schedule a meeting involving Ms. Schertell, Dr. Kramer and the non-executive chair of each company’s board of directors.

On November 22, 2021, Ms. Schertell and Dr. Kramer discussed scheduling an in-person discussion among Ms. Schertell, Mr. Cook, Dr. Kramer and Dr. Rogers in January 2022. Dr. Kramer and Ms. Schertell agreed that getting an advance date on the calendar would be beneficial while Dr. Kramer and Ms. Schertell continued their preliminary, exploratory discussions. After this discussion, Dr. Kramer provided Dr. Rogers with an update regarding the proposed January meeting. Dr. Rogers also noted that he and the rest of the SWM board of directors would likely be amenable to a meeting if the general governance framework of the potential combined company could be advanced prior to such meeting. Ms. Schertell also provided Mr. Cook with an update regarding the proposed January meeting.

On November 30, 2021, SWM and Neenah agreed to extend the term of their mutual non-disclosure agreement through November 30, 2024 to further explore a potential transaction.

On December 6, 2021, Dr. Kramer and Ms. Schertell held a telephone call to discuss the feedback from each company’s board of directors and to plan an in-person meeting for December 13, 2021, at which they would discuss the parties’ potential interest in moving forward with a preliminary evaluation and plan the path forward

 

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for such evaluation. Dr. Kramer and Ms. Schertell also generally discussed a potential transaction timeline and the process for the clean room diligence evaluation. After this discussion, Dr. Kramer provided Dr. Rogers with an update regarding the proposal for an in-person meeting on December 13, 2021, and Ms. Schertell provided Mr. Cook with an update regarding the call with Dr. Kramer.

On December 9, 2021, the SWM board of directors held a meeting with members of SWM’s senior management also in attendance. At the meeting, Dr. Kramer reviewed his discussions with Ms. Schertell regarding a potential business combination transaction with Neenah, as well as the proposed December 13, 2021, meeting between Dr. Kramer and Ms. Schertell. The SWM board of directors and SWM’s senior management also reviewed strategic alternatives available to SWM, including other potential business combinations, a sale of part or all of SWM, other strategic transactions and continuing to focus on executing management’s current strategies and operating as an independent, stand-alone company. During this discussion, Dr. Kramer recommended to the SWM board of directors that SWM continue to execute its current strategy and operate as an independent company, while also evaluating a potential business combination transaction with Neenah. Dr. Kramer also presented the SWM board of directors with a formal approach on how to pursue a step-by-step approach to evaluating the value of such a transaction, which included a potential upcoming discussion with Ms. Schertell regarding the general governance framework of the potential combined company. The SWM board of directors noted the need to validate the synergy potential of a combination of Neenah and SWM, as well as the costs of achieving such synergies, in order to fully evaluate the merits of a potential business combination. Following discussion, the SWM board of directors expressed support for Dr. Kramer’s recommendation and authorized SWM’s management to engage external advisors to assist SWM with an evaluation of a potential business combination transaction and the clean room diligence evaluation. The SWM board of directors also expressed its support for the December 13, 2021, meeting between Dr. Kramer and Ms. Schertell and agreed that a discussion of the general governance framework for the combined company should be on the agenda for such meeting.

On December 13, 2021, Ms. Schertell and Dr. Kramer met in person to align on the focus and process of the clean room diligence evaluation in order to ensure that this evaluation would be conducted in a manner that would allow both parties to fully assess the industrial logic, strategic fit and synergy potential of the potential combination of SWM and Neenah. Ms. Schertell and Dr. Kramer also agreed that a potential general framework for the governance of the combined company for consideration by the SWM and Neenah boards of directors would be important for the SWM and Neenah boards of directors to fully evaluate a potential business combination. Ms. Schertell and Dr. Kramer discussed the possibility of Ms. Schertell serving as the Chief Executive Officer of the combined company, with Dr. Kramer having an advisory role following the closing, if the SWM board of directors and Neenah board of directors were to deem it appropriate. Dr. Kramer also noted that, if the Neenah board of directors deemed it appropriate for Ms. Schertell to serve as the Chief Executive Officer of the combined company, he believed SWM’s board of directors would deem it appropriate for SWM to have the right to designate the chair of the board. Dr. Kramer and Ms. Schertell agreed to further discuss these social and governance issues with the SWM board of directors and Neenah board of directors, respectively.

Following this meeting, Dr. Kramer provided Dr. Rogers with an update regarding his meeting with Ms. Schertell and the discussions regarding the potential governance framework for the combined company. Dr. Kramer noted to Dr. Rogers that if the SWM board of directors was supportive of a potential business combination, Dr. Kramer was amenable to serving in an advisory role post-closing with Ms. Schertell serving as the Chief Executive Officer of the combined company, so long as the board of directors of the combined company was comprised of a majority of directors designated by SWM, with SWM also having the right to designate the chair of the board of directors of the potential combined company. Dr. Rogers expressed his view that, subject to further discussions with the SWM board at a later date, this potential governance framework was sufficient for Ms. Schertell, Mr. Cook, Dr. Kramer and Dr. Rogers to meet in January to continue discussions regarding a potential business combination

On December 17, 2021, the Neenah board of directors held a telephone call with members of Neenah’s senior management. During the call, Ms. Schertell reported to the Neenah board of directors on the latest discussions

 

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she had with Dr. Kramer regarding a potential combination of SWM and Neenah, including the plans for the clean room diligence evaluation, the plans for a January dinner meeting involving Ms. Schertell, Mr. Cook, Dr. Kramer and Dr. Rogers in order to further discuss the potential combination and their discussions regarding the Chief Executive Officer role in the combined company, chair of the board of directors of the potential combined company and Dr. Kramer’s potential advisory role in the combined company. The Neenah board of directors also further discussed the industrial logic, strategic fit and synergy potential of a combination of Neenah and SWM, and other strategic alternatives available to Neenah. As part of this discussion, Neenah’s independent directors again expressed their view that, if the two companies ultimately determined to move forward with the potential combination, Ms. Schertell should likely continue to play an integral role as Chief Executive Officer of the combined company, given their confidence in Ms. Schertell and her ability to unlock the potential benefits of the potential combination, and also that Dr. Kramer should serve in an advisory role as it would be beneficial to the combined company following the closing. Following discussion, the Neenah board of directors directed Neenah management to continue with an evaluation of a potential combination between Neenah and SWM, including further discussions of potential governance structures and operational aspects of the combined company, while continuing to execute its current strategy and operating as an independent, stand-alone company. The Neenah board of directors specifically noted the need to analyze and confirm the industrial logic, strategic fit and synergy potential of the potential combination of Neenah and SWM, in order to fully evaluate the potential combination. The Neenah board of directors also expressed its support for the planned January dinner meeting between Ms. Schertell, Mr. Cook, Dr. Kramer and Dr. Rogers.

On December 20, 2021, SWM engaged J.P. Morgan to act as SWM’s financial advisor for purposes of evaluating a potential transaction. SWM engaged J.P. Morgan due to the fact that, among other matters, J.P. Morgan had acted as SWM’s financial advisor in connection with its prior acquisition of Scapa and was familiar with SWM’s business and strategies as well as SWM’s preliminary discussions with Neenah’s prior Chief Executive Officer regarding a potential transaction. J.P. Morgan’s engagement was formalized in an engagement letter by and between SWM and J.P. Morgan on January 16, 2022.

On January 11, 2022, Ms. Schertell, Mr. Cook, Dr. Kramer and Dr. Rogers attended the scheduled dinner meeting and discussed the potential opportunity to combine Neenah and SWM and the value creation potential for their respective stockholders in a merger of equals transaction between the parties. None of the parties at this meeting proposed any specific transaction terms. The parties also agreed that in addition to further discussions regarding the specifics of the governance of the combined company, SWM’s and Neenah’s continued evaluation of a potential merger of equals transaction should focus primarily on the industrial logic, strategic fit and synergy potential of a combination of Neenah and SWM.

Throughout December 2021 and January 2022, Neenah’s senior management continued to work with Perella Weinberg to evaluate a potential merger of equals transaction, and SWM’s senior management team also continued to work with J.P. Morgan to evaluate a potential merger of equals transaction. During that time, both parties’ senior management teams also met with selected consulting firms to evaluate proposals to assist with diligence, with both parties ultimately agreeing to jointly engage EY-Parthenon (which we refer to as “EY”) on or about January 23, 2022, to evaluate the synergy potential of a merger of equals transaction and advise both parties through the diligence evaluation.

On January 14, 2022, Neenah’s independent directors held a meeting, during which Mr. Cook reported to Neenah’s independent directors on the discussions among Ms. Schertell, Mr. Cook, Dr. Kramer and Dr. Rogers at the January 11, 2022 dinner meeting. Mr. Cook responded to questions from Neenah’s other independent directors, and Neenah’s independent directors discussed the dinner meeting and the potential merger of equals transaction, including the industrial logic, strategic fit and synergy potential of a combination of Neenah and SWM and the timeline and process for the merger generally.

On January 24, 2022, members of both Neenah’s and SWM’s respective senior management teams attended a meeting to jointly review the management presentations prepared by each of Neenah and SWM. Also present at this meeting were representatives of EY, Perella Weinberg and J.P. Morgan. The management presentations were

 

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presented by each senior leadership team and were designed to allow each company’s senior management and financial advisors to continue to evaluate the strategic logic of a potential merger of equals transaction between the companies. The management presentations focused on various financial and operational aspects of the two companies, including the industrial logic, strategic fit and synergy potential of a potential merger of equals transaction.

On January 26-27, 2022, the Neenah board of directors held a regularly scheduled meeting, during which an executive session of the Neenah board of directors was held with Perella Weinberg, Ms. Schertell and Noah Benz, Executive Vice President, General Counsel and Secretary of Neenah, in attendance. During this executive session, Ms. Schertell provided the Neenah board of directors with an update on the management presentations, as well as the status of discussions with SWM and preparations for the clean room diligence evaluation. Ms. Schertell discussed with the Neenah board of directors how the information gathered during Neenah’s initial evaluation of SWM and a potential combination of the two companies by Neenah’s management made the potential merger of equals transaction even more attractive than initially anticipated, with numerous opportunities for significant value creation. Senior management further presented to the Neenah board of directors an overview of their to-date diligence evaluation of SWM, a strategic combination hypothesis, SWM’s fit with Neenah’s current portfolio, and an update on the process generally. Representatives from Perella Weinberg also discussed their views regarding the value that could be created in the potential merger of equals transaction, including the benefits of the increased scale of the combined company, potential strategic synergies and a potentially greater interest from analysts and investors given the increased scale. The Neenah board of directors discussed the merits of the potential merger of equals transaction, including potential value creation through complementary businesses, growth acceleration potential, synergies, strategic combination hypothesis, scale opportunities and a strengthened financial profile. Ms. Schertell described the engagement of EY to conduct an independent review of the potential synergies and value creation of the potential merger of equals transaction. The Neenah board of directors also reviewed Neenah’s business plan and projections if it were to remain an independent, stand-alone company, and confirmed their continued confidence in Neenah’s strategy as an independent, stand-alone company and the value creation anticipated therefrom for Neenah and its stockholders. Following a discussion by Neenah’s independent directors in an executive session of the independent directors, the Neenah board of directors directed Ms. Schertell to continue with the evaluation of the merits of the potential merger of equals transaction, including further discussions of potential governance structures and operational aspects of the combined company, so that the Neenah board of directors could further assess the transaction and the company’s options generally.

On January 28, 2022, Dr. Kramer and Ms. Schertell held a telephone call to discuss the feedback from the Neenah board of directors meeting. Ms. Schertell informed Dr. Kramer that the Neenah board of directors continued to support moving forward with the clean room diligence evaluation to be conducted by EY. Dr. Kramer and Ms. Schertell further discussed next steps for each team to interact with EY, populate the virtual data room with the data necessary for EY to complete its analysis and coordinate additional next steps. Dr. Kramer and Ms. Schertell also agreed to meet again the following week to discuss the progress of both companies’ diligence evaluations.

On February 7, 2022, Dr. Kramer and Ms. Schertell held a telephone call to discuss due diligence and the initial progress on the clean room diligence evaluation. Dr. Kramer and Ms. Schertell also discussed the input they received from their respective boards of directors regarding the potential governance framework for the combined company. Ms. Schertell noted that, while the Neenah board of directors continued to evaluate the proposed combination and the potential governance framework for the combined company, the initial view of Neenah’s independent directors was that Ms. Schertell should serve as Chief Executive Officer of the combined company. Dr. Kramer noted that SWM’s independent directors had indicated that they would be amenable to discussing Ms. Schertell’s role as the Chief Executive Officer of the combined company, subject to continued evaluation of the proposed combination and the potential governance framework of the combined company. Each noted that their respective boards of directors had also indicated that they would likely be supportive of Dr. Kramer serving in an advisory role following the closing and also supportive of the SWM chair serving as the non-executive chair of the combined company, subject to continued evaluation of the proposed combination and

 

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the potential governance framework of the combined company. Dr. Kramer and Ms. Schertell further noted that additional discussions and determinations, including by each company’s board of directors, would be required regarding the potential governance framework of the combined company and other social and governance issues, but that such discussion should be subject to the parties’ continued focus on the industrial logic, strategic fit and synergy potential of a combination of Neenah and SWM.

Following the February 7, 2022 call between Dr. Kramer and Ms. Schertell, Dr. Kramer updated Dr. Rogers on these discussions.

In early February 2022, Neenah instructed BCLP to assist with a legal due diligence review of the publicly-available information related to SWM, and on or about February 21, 2022, BCLP delivered a preliminary legal due diligence memorandum to Neenah.

On February 17, 2022, members of SWM’s senior management team met with the SWM board of directors to provide an update on the potential transaction and the progress and findings of the clean room diligence. Representatives of J.P. Morgan were also in attendance at this meeting. During the meeting, SWM’s senior management reviewed with the SWM board of directors the merits of the potential merger of equals transaction, including potential value creation through complementary businesses, growth acceleration potential, synergies, strategic combination hypothesis, scale opportunities and a strengthened financial profile. SWM’s senior management further presented to the SWM board of directors an overview of their to-date diligence evaluation of Neenah, a strategic combination hypothesis, SWM’s fit with Neenah’s current portfolio, and an update on the process generally. Dr. Kramer reviewed with the SWM board of directors the discussions he had with Ms. Schertell regarding the potential governance framework for the combined company. As part of this discussion, Dr. Kramer noted that, if the SWM board of directors determined that a potential merger of equals transaction had the potential to enhance value for SWM stockholders and deliver the best possible products for SWM’s customers and communities, then he was amenable to a governance framework whereby Ms. Schertell would serve as the Chief Executive Officer of the combined company, he would serve in an advisory role following the closing, and the SWM chair would serve as the non-executive chair of the combined company. Dr. Kramer also discussed with SWM’s board of directors his belief that a governance framework in which a majority of the members of the board of directors were designated by SWM would likely be acceptable to Neenah.

Also during this meeting of the SWM board of directors, representatives of J.P. Morgan discussed certain key considerations that typically arise in a merger of equals transaction, including among other matters, the pro forma stockholder ownership of the combined company, the go-forward governance of the combined company, including appointment of members of management and the composition of the board of directors and committees of the board of directors, and certain other issues regarding the combined company, including selection of the headquarters and name of the combined company. Representatives of J.P. Morgan also reviewed with the SWM board of directors a historical exchange ratio analysis for SWM’s and Neenah’s common stock and the overlap in SWM’s and Neenah’s stockholder base. Following discussion, the SWM board of directors reiterated its support for the continued evaluation of a potential merger of equals transaction with Neenah.

On February 18, 2022, EY provided a preliminary synergies analysis to Neenah’s and SWM’s senior management teams, with representatives of both parties’ financial advisors in attendance. EY shared its initial feedback based on the diligence evaluation of publicly-available information, and the parties’ management teams discussed additional priority areas for continued diligence.

On February 21, 2022, Dr. Kramer and Ms. Schertell held a telephone call to discuss the preliminary synergy analysis and the potential operating model and business unit structure of the proposed combined company. Dr. Kramer and Ms. Schertell agreed that significant synergy potential and strategic logic had been identified in EY’s initial analysis. Dr. Kramer and Ms. Schertell discussed their preliminary thoughts on a potential exchange

 

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ratio. No specific exchange ratio or pro forma ownership of the combined company was discussed by Dr. Kramer or Ms. Schertell during this call, though Dr. Kramer and Ms. Schertell agreed that any exchange ratio and pro forma ownership should be determined over an appropriate historic period that fairly valued both parties’ respective businesses. Dr. Kramer and Ms. Schertell also discussed how the composition of the board of directors of the proposed combined company would need to be agreed if the parties moved forward with the potential merger of equals transaction.

On February 22, 2022, the Neenah board of directors held a special meeting to discuss updates regarding the potential merger of equals transaction. Members of Neenah’s senior management team and representatives of Perella Weinberg were also in attendance at this meeting. During the meeting, senior management reviewed an illustrative transaction timeline and transaction workstreams, key diligence workstreams and findings, including with respect to the preliminary legal due diligence memorandum prepared by BCLP, and the Neenah board of directors, senior management and Perella Weinberg discussed the potential value and benefits of such a transaction to Neenah and its stockholders, including the synergy potential and other value creation opportunities (including from the significant increase in scale and improved strategic position of the combined company, particularly in light of the current industry landscape and the increasing focus on scale and consolidation among key peers of the companies), the tax-efficient nature of the transaction and the meaningful financial flexibility of the combined company. Perella Weinberg also reviewed with the Neenah board of directors certain preliminary aspects of the relative equity valuations and other metrics of the two companies, which Perella Weinberg advised the Neenah board of directors were consistent with merger of equals transactions. Senior management reviewed the synergy analysis performed by EY. Ms. Schertell also provided the Neenah board of directors with another update on her discussions with Dr. Kramer, including their discussions regarding the CEO role in a potential combined company and each of Ms. Schertell’s and Dr. Kramer’s interests in potentially continuing in that role, discussions regarding Dr. Kramer potentially having an advisory role following the closing, discussions regarding SWM’s chair potentially serving as non-executive chair of the combined company and discussions regarding the potential apportionment of seats for the board of directors of the combined company between the two companies. The Neenah board of directors and senior management agreed that, while the potential strategic benefits of the transaction, such as synergy potential and other value creation opportunities, were becoming clearer, additional confirmatory work and diligence still remained. The Neenah board of directors also reviewed again Neenah’s business plan and projections if it were to remain an independent, stand-alone company, and confirmed their continued confidence in Neenah’s strategy as an independent, stand-alone company and the value creation anticipated therefrom for Neenah and its stockholders. During this meeting, the Neenah board of directors held an executive session of the independent directors, at which Neenah’s independent directors further discussed Neenah’s business plan, projections and historical financials, and their perspectives on the potential merger of equals transaction. Following this discussion, Neenah’s independent directors reiterated their support for the continued evaluation of a potential merger of equals transaction with SWM, so that the Neenah board of directors could further assess the transaction.

On February 25, 2022, Dr. Kramer and Ms. Schertell held a telephone call to discuss feedback from the Neenah board of directors meeting. Ms. Schertell indicated that the Neenah board of directors remained generally supportive of the continued evaluation of a potential merger of equals transaction, subject to satisfactory completion of diligence and the synergy analysis from EY. Additionally, Ms. Schertell and Dr. Kramer expressed continued organizational support from both companies in moving forward in a merger of equals transaction.

On March 4, 2022, the Neenah board of directors held a special meeting to discuss the status of the ongoing diligence evaluation and financial analysis for the potential merger of equals transaction. Members of Neenah’s senior management and representatives of Perella Weinberg were also in attendance at this meeting. At that meeting, Mr. Cook provided an update to Neenah’s other independent directors regarding a telephone call he had with a representative from Cravath, Swaine & Moore LLP (which we refer to as “Cravath”) in February 2022, and Neenah’s independent directors expressed their view that the independent directors having their own counsel in a potential significant merger transaction would be helpful. Following discussion, Neenah’s independent directors determined to formally engage Cravath as counsel to Neenah’s independent directors in connection with

 

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the potential merger of equals transaction. During the meeting, senior management again reviewed an illustrative transaction timeline and transaction workstreams and key diligence workstreams and findings. The Neenah board of directors discussed with representatives of Perella Weinberg and senior management various metrics and how they impacted the relative contribution of each company in a merger of equals transaction, and representatives of Perella Weinberg confirmed that the relative equity valuations and other metrics of the two companies remained consistent with merger of equals transactions. Senior management also presented to the Neenah board of directors on the SWM business, strategic fit, preliminary results of due diligence and market assessments. The Neenah board of directors and senior management also discussed the preliminary synergy analysis by EY and senior management, the potential acceleration of growth and benefits of scale from a potential combination and high level transaction terms for the potential merger of equals transaction, including the composition of the board of directors of the combined company, the role of chair of the board of directors of the combined company, the role of Chief Executive Officer of the combined company and the headquarters, name and operating model of the combined company.

On March 7, 2022, Neenah’s independent directors held a meeting. Representatives of Cravath were present at the meeting. At the meeting, Neenah’s independent directors provided Cravath with a comprehensive summary of the background for the potential merger of equals transaction. Representatives of Cravath discussed with Neenah’s independent directors their fiduciary duties, both in general and in the context of various types of transactions (including merger of equals transactions), as well as how the Neenah board of directors might evaluate the potential transaction with SWM. Representatives of Cravath also discussed with Neenah’s independent directors typical elements of merger of equals transactions. Neenah’s independent directors then discussed the potential governance structure of the combined company, including the role of Chief Executive Officer of the combined company. As part of this discussion, Neenah’s independent directors again expressed their view that, if the two companies ultimately determined to move forward with the potential combination, Ms. Schertell should likely continue to play an integral role as Chief Executive Officer of the combined company, given their confidence in Ms. Schertell and her ability to unlock the potential benefits of the potential combination. After discussion, Neenah’s independent directors determined to further discuss the Chief Executive Officer role and other governance aspects of the combined company at subsequent meetings, once additional financial and operational diligence had been completed and there was greater clarity regarding the potential combined company. Neenah’s independent directors then discussed potential terms and next steps for the potential merger of equals transaction between SWM and Neenah, including with respect to the completion of diligence and negotiation of definitive transaction documentation.

On March 10, 2022, the Neenah board of directors held a special meeting to discuss the status of the ongoing diligence evaluation and financial analysis for the potential merger of equals transaction. Members of Neenah’s senior management and representatives of Perella Weinberg were also in attendance. At this meeting, Ms. Schertell reviewed an updated illustrative transaction timeline and key workstreams. Ms. Schertell and other senior management gave an update with respect to the status of the diligence evaluation of SWM and the potential business combination between Neenah and SWM, confirming that no material issues had been identified. Perella Weinberg and Neenah’s senior management team then reviewed a preliminary set of synergy estimates from the EY analysis, merger of equals exchange ratio calculations and considerations, comparisons to “hold value” estimates, an early view of SWM’s environmental, social and governance profile, and an illustrative business structure for the proposed combined company. Perella Weinberg and senior management also reviewed Neenah’s business plan and projections if it were to remain an independent, stand-alone company and the valuation implied by such plan and projections, including in light of changes since the Neenah board of directors had last considered such plan and projections. The Neenah board of directors again discussed with representatives of Perella Weinberg and senior management various metrics and how they impacted the relative contribution of each company in a merger of equals transaction. In addition, the Neenah board of directors discussed with senior management the strategic fit, preliminary diligence results, and the potential acceleration of growth and benefits of scale from a potential combination. After discussion, the Neenah board of directors agreed that the merger of equals transaction between SWM and Neenah continued to represent an attractive opportunity to create value for Neenah and its stockholders above that which was expected if Neenah remained an

 

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independent, stand-alone company. The Neenah board of directors directed senior management to execute a formal engagement letter with Perella Weinberg to confirm Perella Weinberg’s engagement as Neenah’s financial advisor in connection with the potential merger of equals transaction. Perella Weinberg was selected due to Perella Weinberg’s knowledge of the business and affairs of Neenah, including from Neenah’s prior experiences working with Perella Weinberg on strategic transactions and the board of directors’ belief that Perella Weinberg had extensive experience advising companies in the industry, as well as significant experience providing strategic and financial advisory services in comparable merger of equals transactions.

On March 11, 2022, Neenah formally entered into an engagement letter with Perella Weinberg, confirming Perella Weinberg’s engagement as Neenah’s financial advisor in connection with the potential merger of equals transaction.

Throughout February and early-to-mid-March 2022, senior management and advisors of both Neenah and SWM continued their respective diligence evaluations based on publicly-available information. On March 11, 2022, the parties opened another virtual dataroom, which was populated with non-public due diligence materials of each party in response to diligence request lists that were prepared by the parties and their respective advisors. During this time, senior management of each party responded to the due diligence requests of the other party and its respective advisors by uploading responsive documents in the virtual dataroom, providing written responses and participating in due diligence calls.

Following the opening of the virtual dataroom, throughout February and March, SWM’s senior management met periodically with representatives of King & Spalding LLP (which we refer to as “King & Spalding”), SWM’s legal advisor, to review transaction timelines, review and respond to Neenah’s open diligence requests, review and supplement SWM’s open diligence requests, review and discuss preliminary legal diligence findings and discuss structural considerations for a potential transaction. During this period, Neenah’s senior management also met periodically with representatives from BCLP to review and discuss preliminary diligence findings and supplemental diligence requests, the proposed structure for the potential transaction, transaction timelines, and the process generally.

On March 14, 2022, Dr. Kramer and Ms. Schertell held a telephone call to discuss impressions of the EY synergies analysis resulting from the clean room diligence evaluation. Dr. Kramer and Ms. Schertell agreed that significant synergy potential and strategic logic had been detailed in the EY report. Dr. Kramer and Ms. Schertell planned to meet in person on March 17, 2022, after SWM’s and Neenah’s respective board of directors meetings (on March 15 and March 16, respectively), together with Dr. Rogers and Mr. Cook, along with Dr. Kimberly Ritrievi, SWM’s Audit Committee chair, to discuss a potential path forward in the event that both companies’ boards of directors approved proceeding with the negotiation of transaction terms and definitive transaction agreements.

On March 14 and March 15, 2022, Ms. Schertell and Dr. Kramer held telephone calls during which they discussed potential cost synergies that could be achievable in the transaction, as well as how the complementary portfolios and business strategies of SWM and Neenah could position the combined company to better serve customers and provide more flexibility to both companies’ profiles. Ms. Schertell and Dr. Kramer also discussed possible approaches to calculating a fixed exchange ratio for the proposed merger of equals transaction, with both parties acknowledging that any exchange ratio should be based on average valuation metrics over an appropriate period of time rather than valuation metrics as of or immediately prior to a specific date. They also continued discussions of potential governance structures of the combined company, including the composition and size of the board of directors of the combined company, the headquarters of the combined company and whether the combined company would change its name. Both Ms. Schertell and Dr. Kramer agreed to continue to discuss the specifics regarding governance of the combined company, along with the various other transaction considerations, with their respective boards of directors.

On March 15, 2022, members of SWM’s senior management team met with the SWM board of directors to provide an update on the potential transaction. Representatives of J.P. Morgan and King & Spalding were also in

 

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attendance at this meeting. During the meeting, representatives of King & Spalding discussed with the SWM board of directors its fiduciary duties, both in general and in the context of various types of transactions (including merger of equals transactions), as well as how the SWM board of directors might evaluate the potential transaction with Neenah. The SWM board of directors and SWM’s senior management reviewed EY’s synergies analysis resulting from the clean room diligence evaluation. As part of this discussion, the SWM board of directors, SWM’s senior management and representatives of J.P. Morgan discussed the potential financial and strategic benefits of a potential merger of equals transaction to SWM and its stockholders, including the synergy potential and other potential value creation opportunities (including from the expected increase in scale and improved strategic position of the combined company, particularly in light of the current industry landscape and the increasing focus on scale and consolidation among key peers of the two companies), the tax-efficient nature of the potential transaction and the improved financial flexibility of the combined company. SWM’s senior management noted that, based on its ongoing assessment of the potential merger of equals transaction and the due diligence and synergy analysis, it continued to believe that the potential merger of equals transaction was a compelling synergistic combination offering significant benefits to both parties, and would enable the combined company to unlock significant value in the market. Additionally, Dr. Kramer reviewed the recent discussions he had with Ms. Schertell regarding a potential transaction with Neenah, including their discussions regarding potential governance structures and potential approaches to exchange ratios. Representatives of J.P. Morgan reviewed with the SWM board of directors a preliminary financial analysis of illustrative exchange ratios, and the potential premiums and discounts associated with each such exchange ratio. After discussion, the SWM board of directors agreed that the merger of equals transaction between SWM and Neenah continued to represent an attractive opportunity to create value for SWM and its stockholders above that which was expected if SWM remained an independent, stand-alone company and instructed J.P. Morgan to continue to analyze possible exchange ratios for a potential transaction for further discussion with the SWM board of directors at a meeting to be held on March 18, 2022.

On March 16, 2022, the Neenah board of directors held a meeting to discuss the proposed transaction and review the results of the diligence evaluation. Representatives of Perella Weinberg, EY and Cravath were present at the meeting. During this meeting, the Neenah board of directors held two executive sessions of the independent directors, with representatives of Cravath present for the second executive session. During the first executive session, Neenah’s independent directors discussed the agenda for the meeting, including key points for discussion. During the second executive session, representatives of Cravath reviewed with Neenah’s independent directors their fiduciary duties, both in general and in the context of various types of transactions (including merger of equals transactions), which they had discussed in detail with Neenah’s independent directors at a prior meeting. Following the executive sessions, Ms. Schertell provided an update on her latest discussions with Dr. Kramer regarding the proposed merger of equals transaction, including their discussions regarding potential governance structures and potential approaches to exchange ratios.

Also at the March 16, 2022 meeting, EY presented the Neenah board of directors with its synergies analysis resulting from the clean room diligence evaluation, including the process to complete the analysis, the confidence in their findings and the conclusions and assumptions. EY shared its overall assessment that the potential merger of equals transaction was a compelling synergistic combination offering significant benefits to both parties and would enable the combined company to unlock significant value in the market. The Neenah board of directors discussed with EY the potential benefits and difficulties of achieving the various synergies, the reasons behind EY’s assumptions, the success rates of merger of equals transactions in capturing synergies and the costs and timeline associated with capturing such synergies. Senior management also summarized the to-date diligence evaluation of SWM and the potential combination of Neenah and SWM. Senior management further noted to the Neenah board of directors that the diligence evaluation conducted thus far did not produce any material concerns. At this same meeting, Perella Weinberg also reviewed an illustrative transaction timeline and transaction workstreams, and provided the Neenah board of directors with a preliminary valuation analysis of Neenah and SWM and an illustrative range of exchange ratios implied thereby. The Neenah board of directors discussed the potential exchange ratios, including negotiation strategy with respect to the exchange ratio and also discussed the potential timing of the potential merger of equals transaction.

 

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The Neenah board of directors held two additional executive sessions at the end of the March 16, 2022 meeting, the first with Ms. Schertell and Cravath in attendance and the second with just Neenah’s independent directors and Cravath in attendance. During the first of these two additional executive sessions, the Neenah board of directors further discussed EY’s synergies analysis, including Ms. Schertell’s views of EY’s process, conclusions and assumptions. During the final of these two additional executive sessions, Neenah’s independent directors again discussed the governance structure for the potential combined company, including whether Ms. Schertell should serve as Chief Executive Officer and director of the combined company. Neenah’s independent directors noted Ms. Schertell’s extensive leadership skills and business acumen, her significant experience with Neenah’s business, the progress they felt she had been making in executing Neenah’s strategic plan and setting up the company for long-term success and the integral role that they believed she would play as part of the combined company if a transaction was consummated. In this regard, Neenah’s independent directors determined that it would be in the best interests of Neenah and its stockholders for Ms. Schertell to serve as the Chief Executive Officer and a director of the combined company in order to achieve the value creation anticipated for Neenah and its stockholders from the potential merger of equals transaction. Neenah’s independent directors also discussed the most appropriate role for Dr. Kramer in the combined company and agreed that the combined company would benefit from Dr. Kramer having an advisory role following the closing. Neenah’s independent directors then discussed other aspects of the go-forward governance of the combined company, including the composition of the board of directors and the chair of the board of directors. Following discussion, Neenah’s independent directors agreed on certain aspects of the go-forward governance structure of the combined company that should be proposed to SWM. Neenah’s independent directors agreed that Mr. Cook should discuss the potential governance structure of the combined company, including Ms. Schertell serving as Chief Executive Officer and Dr. Kramer serving in an advisory role following the closing, with Ms. Schertell, Dr. Kramer, Dr. Rogers and Dr. Ritrievi at their meeting scheduled for March 17, 2022. Following this discussion, Neenah’s independent directors expressed support for continuing to pursue the potential merger of equals transaction with SWM.

Following the final executive session on March 16, 2022, the Neenah board of directors directed senior management to continue negotiations on the terms of a merger of equals transaction. Neenah’s independent directors also requested that Ms. Schertell work with Dr. Kramer, SWM and their respective advisors to negotiate governance issues consistent with the approach proposed by Neenah’s independent directors.

On March 17, 2022, Mr. Cook held a telephone call with a representative from EY, during which EY provided responses to certain questions that had been asked by Neenah’s independent directors at the March 16, 2022, meeting of the Neenah board of directors. Mr. Cook discussed the responses with the representative from EY and then provided an update to Neenah’s other independent directors.

On March 17, 2022, Ms. Schertell, Dr. Kramer, Dr. Rogers, Mr. Cook and Dr. Ritrievi met in person in Atlanta, Georgia to discuss the next steps for the potential merger of equals transaction, which would include the negotiation of an exchange ratio and to discuss the potential governance structure of the combined company, including Ms. Schertell serving as Chief Executive Officer, Dr. Kramer serving in an advisory role following the closing, Dr. Rogers serving as the non-executive chair of the board of directors of the combined company and the composition of the board of directors of the combined company.

On March 17, 2022, each of Ms. Schertell and Dr. Kramer, and Perella Weinberg and J.P. Morgan, held separate telephone calls to discuss valuation-related matters for the potential merger of equals transaction, while senior management of both companies continued discussions regarding diligence on tax, accounting and other matters.

On March 18, 2022, members of SWM’s senior management team met with the SWM board of directors. Representatives of King & Spalding and J.P. Morgan were also present. At the meeting, Dr. Rogers discussed the meeting with Ms. Schertell and Mr. Cook that occurred the prior day. Representatives of J.P. Morgan also reviewed with the SWM board of directors a preliminary financial analysis of illustrative exchange ratios and the potential premiums and discounts associated with each such exchange ratio. After discussion, the SWM board of directors instructed SWM’s senior management and J.P. Morgan to propose to Neenah an exchange ratio that

 

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would result in SWM’s stockholders owning 58.5% of the combined company, with Neenah’s stockholders owning 41.5% of the combined company.

Also on March 18, 2022, following the meeting of the SWM board of directors, J.P. Morgan and Perella Weinberg held a telephone call during which J.P. Morgan, as instructed by the SWM board of directors, orally delivered SWM’s pro-forma ownership proposal, whereby current SWM and Neenah stockholders would own 58.5% and 41.5% of the shares of the combined company, respectively.

Also on March 18, 2022, Neenah distributed to SWM a preliminary draft term sheet outlining certain of the terms of the proposed combination. The parties agreed that they were generally aligned on certain structural aspects of the transaction, and further agreed to reach agreement on the exchange ratio and proceed directly to drafting and negotiating a definitive merger agreement instead of negotiating the term sheet.

On March 19, 2022, the Neenah board of directors held a special meeting. Members of Neenah’s senior management and representatives of Perella Weinberg and Cravath were present at the meeting. At the meeting, Ms. Schertell provided the Neenah board of directors with an update on the implied exchange ratio ranges proposed by SWM, including how they compared to Neenah’s and SWM’s relative equity valuations and other metrics. Following discussion, the Neenah board of directors directed management to propose an exchange ratio to SWM that would result in Neenah’s stockholders owning 42% of the combined company on a fully diluted basis and to move forward with negotiating definitive transaction agreements on that basis.

On March 20, 2022, representatives of King & Spalding had a telephone call with SWM’s senior management, Dr. Rogers, and Jeffrey Keenan, the chair of SWM’s Nominating & Governance Committee, regarding the go-forward governance of the combined company, including appointment of members of management and the composition of the board of directors and committees of the board of directors, and social issues regarding the combined company, including selection of the headquarters and name of the combined company. After discussion, Dr. Rogers and Mr. Keenan instructed representatives of King & Spalding to prepare an initial draft of the merger agreement that contemplated a board of directors of the combined company having a majority of the directors designated by SWM.

Also on March 20, 2022, members of SWM’s senior management team met with the SWM board of directors. Representatives of King & Spalding and J.P. Morgan were also present. During the meeting, representatives of J.P. Morgan informed the SWM board of directors that Neenah proposed an exchange ratio whereby current SWM and Neenah stockholders would own 58% and 42% of the combined company, respectively. After discussion, the SWM board of directors instructed SWM’s senior management and its representatives to inform Neenah that, assuming satisfactory completion of the parties’ reciprocal due diligence and if mutually acceptable terms of a merger agreement could be negotiated, Neenah’s proposal was acceptable and to move forward with negotiating a draft merger agreement on that basis.

On March 22, 2022, members of SWM’s senior management team met with the SWM board of directors. Representatives of King & Spalding and J.P. Morgan were also present. During the meeting, representatives of King & Spalding reviewed the key terms of an initial draft of the merger agreement with the SWM board of directors, including the provisions regarding the size and composition of the board of directors and committees of the board of directors of the combined company. SWM’s senior management also reviewed the SWM prospective financial information with the SWM board of directors. After discussion, the SWM board of directors authorized SWM’s senior management and its representatives to provide the initial draft of the merger agreement to Neenah.

Also on March 22, 2022, King & Spalding, on behalf of SWM, delivered an initial draft of the merger agreement to Neenah’s counsel, BCLP. During the period between March 22 and March 25, 2022, representatives of King & Spalding, on the one hand, and BCLP, on the other hand, exchanged several drafts of the merger agreement and engaged in negotiations and discussions regarding the terms and conditions of the merger agreement. The parties also exchanged several drafts of the proposed financing documentation, including a

 

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commitment letter and related fee letters from SWM’s prospective lenders, which were to be executed concurrently with the merger agreement. Senior management of Neenah and SWM also engaged in negotiations and discussions with their respective legal representatives. Throughout this process and the succeeding days, Neenah’s independent directors also had telephone calls and other communications with members of Neenah’s senior management, BCLP and Cravath in order to inquire about status of negotiations and to ask questions and provide feedback regarding potential transaction terms. Also throughout this process and the succeeding days, SWM’s directors, including Dr. Rogers and Mr. Keenan, had telephone calls and other communications with members of SWM’s senior management and King & Spalding to inquire about status of negotiations and ask questions and provide feedback regarding potential transaction terms.

On March 24, 2022, members of SWM’s senior management team met with the SWM board of directors. Representatives of King & Spalding and J.P. Morgan were also present. At the meeting, SWM’s senior management and representatives of J.P. Morgan reviewed with the SWM board of directors certain financing options SWM could pursue in connection with the financing of a potential transaction with Neenah. As part of this discussion, SWM’s senior management and representatives of J.P. Morgan discussed with the SWM board of directors the proposed financing structure for the transaction and the potential implications that such financing structure could have on the capital structure and financial flexibility of the combined company as well as the fees and costs associated with the financing.

Also on March 24, 2022, members of SWM’s senior management and representatives of King & Spalding met with members of Neenah’s senior management and representatives of BCLP on a legal diligence call. On the legal diligence call, SWM’s senior management asked questions regarding Neenah’s commercial operations, legal compliance and risks, continued synergy analysis, finance and tax matters, labor and employment matters, information technology matters, insurance matters, tax structuring and regulatory matters.

On March 25, 2022, Perella Weinberg and J.P. Morgan calculated an exchange ratio of 1.358 shares of SWM common stock for each share of Neenah common stock, such that, as instructed by the respective boards of directors of SWM and Neenah, SWM stockholders would own 58% of the combined company on a fully diluted basis, and Neenah stockholders would own 42% of the combined company on a fully diluted basis, subject to approval by both parties’ boards of directors.

On March 25, 2022, the SWM board of directors held a meeting with members of SWM’s senior management and representatives of J.P. Morgan and King & Spalding present. Representatives of J.P. Morgan reviewed with the SWM board of directors certain preliminary financial analyses regarding the transaction and answered questions regarding such preliminary analyses. Representatives of King & Spalding reviewed the legal due diligence conducted to date, expressing their view that such legal due diligence did not identify any items that were expected to have a material adverse impact on the value of and strategic rationale for the merger to SWM or its stockholders. In addition, representatives of King & Spalding discussed with the SWM board of directors the remaining open issues in the draft merger agreement, including the board and committee selection criteria of the combined company during the three-year post-closing period.

Also on March 25, 2022, the Neenah board of directors held a special meeting with members of Neenah’s senior management and representatives of Perella Weinberg and Cravath present. The materials received by the Neenah board of directors prior to the meeting included copies of the draft merger agreement and related documents, a copy of the legal due diligence memorandum prepared by BCLP, a summary of the proposed financing to be provided by SWM’s prospective lenders and a summary of the terms of the draft merger agreement prepared by BCLP.

The Neenah board of directors also received presentation materials prepared by Perella Weinberg. Representatives of Perella Weinberg provided the Neenah board of directors with a market update, which update included a discussion of the relative valuation of Neenah and SWM in light of market developments since the last update provided by Perella Weinberg and how those relative valuations related to the proposed exchange ratio for the merger of equals. Representatives of Perella Weinberg also reviewed with the Neenah board of directors their financial analysis of the transaction and answered questions regarding such analysis. Following discussion,

 

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Mr. Benz reviewed the legal due diligence memorandum prepared by BCLP. Mr. Benz responded to questions from the Neenah board of directors and, during the discussion of the legal due diligence memorandum, Mr. Benz expressed his view that legal due diligence did not identify any items that were expected to have a material adverse impact on the value of and strategic rationale for the merger of equals transaction to Neenah or its stockholders. Mr. Benz then reviewed the material terms of the draft merger agreement with the Neenah board of directors, and the board of directors discussed such terms and certain governance matters that remained to be resolved. Following discussion, senior management presented the Neenah board of directors with an overview of the proposed financing structure for the transaction and answered questions related to the proposed financing structure, including the implications for the capital structure and financial flexibility of the combined company as well as the fees and costs associated with the financing.

During the meeting on March 25, 2022, Neenah’s independent directors held an executive session with Cravath in attendance. During this executive session, Neenah’s independent directors discussed the information that had been shared and discussed at the meeting, including the anticipated benefits of the potential merger of equals transaction and the updates provided by senior management and Perella Weinberg during the meeting. Neenah’s independent directors also reviewed and discussed questions that members of the Neenah board of directors had asked senior management based on their review of the draft merger agreement and legal due diligence memorandum that was provided to them in advance of the meeting, as well as the responses to such questions that management had provided. After discussion, Neenah’s independent directors then discussed with representatives of Cravath the draft merger agreement that had been circulated in advance of the meeting, as well as a list of certain items for discussion that Cravath had prepared based on such draft and circulated to Neenah’s independent directors prior to the meeting. Among the items discussed were the level of closing risk implied by the draft merger agreement (including the regulatory efforts covenant, the termination date and key closing conditions), key governance issues (including the provisions related to the chief executive officer and other management of the combined company and provisions related to the board of directors of the combined company) and the termination and non-solicitation provisions of the draft merger agreement and the key exceptions thereto (including the inclusion of a “force the vote” provision restricting Neenah from terminating the merger agreement to accept a superior proposal and the amount of and triggers for the fees payable by Neenah in certain circumstances following a termination of the merger agreement). Neenah’s independent directors then discussed the benefits they believed the potential merger of equals transaction afforded to Neenah and its stockholders, including the potential synergies and growth of the combined company. Neenah’s independent directors then discussed next steps with respect to the potential merger of equals transaction, including the approach to negotiating such provisions, and agreed to communicate such matters to senior management.

From March 25, 2022 to March 26, 2022, SWM’s and Neenah’s senior management, along with representatives of BCLP and King & Spalding, continued to negotiate and exchange drafts of the merger agreement, including the disclosure schedules to the merger agreement and other related matters. On March 25, 2022, King & Spalding, on behalf of SWM, delivered a proposed draft of the SWM bylaw amendment, which set forth proposed corporate governance features of the combined company, to Neenah via its counsel at BCLP.

At a continuation of the March 25, 2022 meeting, Neenah’s independent directors held an executive session on the afternoon of March 26, 2022, with representatives of Cravath in attendance. During this executive session, Neenah’s independent directors reviewed and discussed questions that Neenah’s independent directors had asked senior management based on their review of the revised draft merger agreement and the draft SWM bylaw amendment that was provided to them in advance of the meeting, as well as the responses to such questions that management had provided. Neenah’s independent directors then discussed certain videoconferences that Mr. Cook had with representatives of Cravath and senior management prior to such executive session in order to discuss the draft transaction documentation and to receive an update regarding diligence and negotiations, as well as to ask certain follow-up questions related to the draft transaction documentation. Neenah’s independent directors then discussed with representatives of Cravath the revised draft merger agreement and the draft SWM bylaw amendment that had been circulated in advance of the meeting, as well as a list of certain items for discussion that Cravath had prepared based on such drafts and circulated to Neenah’s independent directors prior to the meeting. Among the items discussed were the continuation of benefits for Neenah’s employees, key

 

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governance issues (including the provisions related to the combined company’s name and stock ticker symbol, provisions related to the Chief Executive Officer of the combined company and provisions related to the board of directors of the combined company) and the termination provisions of the merger agreement (including the amount of and triggers for the fees payable by Neenah in certain circumstances following a termination of the Merger Agreement). Representatives of Cravath then reviewed with Neenah’s independent directors their fiduciary duties, both in general and in the context of various types of transactions (including merger of equals transactions), which they had discussed in detail with Neenah’s independent directors at a prior meeting. Neenah’s independent directors then discussed the benefits they believed the potential merger of equals transaction afforded to Neenah and its stockholders, including the potential synergies and growth of the combined company. Neenah’s independent directors agreed to re-convene in an executive session during the meeting of the Neenah board of directors scheduled for that afternoon in order to discuss next steps with respect to the potential merger of equals transaction, including approach to negotiating such provisions, after receiving a further update from senior management and BCLP.

Following such executive session, Neenah’s full board of directors then continued the March 25 meeting on the afternoon of March 26, 2022, prior to which they were provided with an updated draft of the merger agreement as well as the draft SWM bylaw amendment. Representatives of Perella Weinberg, Cravath and BCLP were present. BCLP provided the Neenah board of directors with an update on the remaining open items in the merger agreement, negotiations conducted to date, as well as an overview of the initial draft SWM bylaw amendment. Neenah’s independent directors discussed their views regarding the open items, including that the transaction documentation needed to (i) more clearly reflect the plans for the combined company’s new name and stock ticker symbol, (ii) include heightened requirements to remove Ms. Schertell as Chief Executive Officer of the combined company for a period of time following the closing, (iii) include other specific governance requirements for a period of time following the closing and (iv) reflect a lower termination fee for the parties.

Following such continued meeting of the Neenah board of directors, the independent directors entered another executive session on March 26, 2022 with Cravath in attendance. During this executive session, Neenah’s independent directors discussed the information that had been shared and discussed at the meeting, including the updates provided by senior management, Perella Weinberg and BCLP during the meeting. Neenah’s independent directors then discussed with representatives of Cravath the provisions of the merger agreement and SWM bylaw amendment that had been discussed at the executive session of Neenah’s independent directors earlier that day and that were not yet resolved. After discussion, Neenah’s independent directors agreed on a list of items that Mr. Cook would discuss with Dr. Rogers, non-executive chair of SWM, and a list of items that Mr. Cook would ask senior management and BCLP to discuss with SWM and King & Spalding. Neenah’s independent directors then discussed a potential plan to sign transaction documentation and announce a transaction on Monday, March 28, 2022 if the transaction were approved by the companies’ respective boards of directors. Neenah’s independent directors agreed that the items to be discussed between Mr. Cook and Dr. Rogers needed to be satisfactorily resolved before they would consider approving the transaction. Neenah’s independent directors agreed to reconvene the morning of Sunday, March 27, 2022 in order to further discuss next steps with respect to the potential merger of equals transaction in light of any additional developments at that time.

On the evening of March 26, 2022, Mr. Cook called Dr. Rogers, non-executive chair of SWM, to discuss open business issues, including with respect to the governance issues to be addressed in the SWM bylaw amendment. The issues discussed included (i) more clearly reflecting the plans for the combined company’s new name and stock ticker symbol, (ii) requiring at least 75% of the independent directors of the combined company in order to remove Ms. Schertell during the three (3) years following closing, (iii) including Ms. Schertell in the class of directors that would be up for re-election three (3) years after closing and (iv) certain other governance requirements. Following that call, Mr. Cook then had a call with BCLP and Neenah’s senior management to provide an update from his discussion with Dr. Rogers and directed BCLP and Neenah’s senior management to further revise the merger agreement and the SWM bylaw amendment in accordance with such discussions and to also negotiate certain other changes discussed by Neenah’s independent directors in their executive session but not discussed by Mr. Cook and Dr. Rogers (including reducing Neenah’s termination fee).

 

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From March 26, 2022 to March 27, 2022, SWM’s and Neenah’s senior management, along with representatives of BCLP and King & Spalding, continued to negotiate and finalize the merger agreement, the SWM bylaw amendment and other related matters.

On the morning of March 27, 2022, Neenah’s independent directors again held an executive session in continuation of the March 25, 2022 meeting, with Cravath in attendance. Representatives of Cravath again reviewed with Neenah’s independent directors their fiduciary duties, both in general and in the context of a merger of equals transaction, which they had discussed in detail with Neenah’s independent directors at prior meetings. Cravath then summarized the provisions of the draft transaction documentation that were discussed during the meetings on March 26, 2022, and Mr. Cook summarized for the other independent directors the discussions he had with Dr. Rogers and with senior management and BCLP the night before. After discussion, Neenah’s independent directors then discussed senior management’s responses to certain questions that the independent directors had asked management and representatives of BCLP prior to the meeting based on their review of the revised draft transaction documentation that was provided to them in advance of the meeting. Neenah’s independent directors agreed that very good progress had been made since their last meeting and then discussed the issues that still needed to be resolved in the transaction documentation, which included accurately reflecting in the transaction documentation the plans to change the name and ticker symbol of the combined company. Neenah’s independent directors then agreed on a list of items that Mr. Cook would share with senior management and BCLP for senior management and BCLP to negotiate with SWM and King & Spalding and reflect in the draft transaction documentation.

On the afternoon of March 27, 2022, the Neenah board of directors again continued the March 25 meeting. Prior to the continued meeting, the Neenah board of directors had received updated copies of the draft merger agreement and related documents, the SWM bylaw amendment, the draft commitment letter and related fee letters in connection with the committed financing to be provided by SWM’s prospective lenders and summaries of the transaction documentation, as well as a draft of Perella Weinberg’s written fairness opinion.

At this continued meeting, BCLP reviewed the Neenah board of directors’ fiduciary duties, both in general and in the context of the proposed merger of equals. BCLP and Neenah’s senior management also (i) reviewed with the Neenah board of directors the timeline and details of the negotiation process for the transaction, including with respect to the term sheet and the definitive transaction documentation negotiated by the parties, (ii) provided a summary of the material terms of the transaction documentation, including the merger agreement and related documentation, the SWM bylaw amendment and the financing documentation and (iii) provided a summary of the legal due diligence that had been performed and the findings thereof. BCLP also discussed with the Neenah board of directors the typical elements of merger of equals transactions, and the representatives of BCLP confirmed their belief that the terms of the transaction documentation were within the range of merger of equals transactions.

Also at the meeting continued on March 27, 2022, representatives of Perella Weinberg presented to the Neenah board of directors Perella Weinberg’s financial analysis of the exchange ratio in the potential merger of equals transaction in light of the relative equity valuations and other metrics of the two companies. As part of that presentation, Perella Weinberg and senior management again discussed with the Neenah board of directors management’s projections for Neenah if it continued to pursue its strategy as an independent, stand-alone company, as well as the anticipated synergies and other value creation from the potential merger of equals transaction. Perella Weinberg further discussed with the Neenah board of directors the transaction structure and terms, including the relative capitalization (including leverage) of the two companies and different valuation metrics for the two companies over time. Following the discussion, Perella Weinberg rendered to the Neenah board of directors an oral opinion, which was subsequently confirmed by delivery of a written opinion dated March 27, 2022, that as of such date and based upon and subject to various assumptions made, procedures followed, matters considered and qualifications and limitations set forth in the draft fairness opinion that had been provided to the Neenah board of directors prior to the meeting, the exchange ratio provided for pursuant to the merger agreement was fair, from a financial point of view, to the holders of outstanding shares of Neenah’s common stock (other than SWM and its affiliates). For a detailed discussion of Perella Weinberg’s opinion, see the section entitled “—Opinion of Neenah’s Financial Advisor—Opinion of Perella Weinberg” beginning on

 

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page 96. Also at the continued meeting on March 27, 2022, the Neenah board of directors then discussed the proposed amendments to Neenah’s bylaws in order to add a forum selection provision, as well as the benefits to Neenah (including potential reduction in costs to the company, as well as maximizing predictability in the legal framework applicable to the company).

The Neenah board of directors then entered an executive session with the full board of directors and Cravath in attendance. During this executive session, Neenah’s independent directors asked questions of Ms. Schertell, including questions regarding anticipated reactions of various stakeholders to the potential merger of equals transaction, and further discussed the potential merger of equals transaction.

The Neenah board of directors then entered an executive session with only Neenah’s independent directors and Cravath in attendance. During this executive session, Neenah’s independent directors discussed the information that had been shared and discussed at the meeting and the prior executive session, including the review of key deal terms, the financial analysis of Neenah on a standalone basis and of the potential merger of equals transaction, the expected risks and benefits of the potential merger of equals transaction and the expected reactions of stakeholders. Neenah’s independent directors also discussed the revised drafts of the transaction documentation, and agreed that the open issues had been satisfactorily resolved and that the potential merger of equals transaction was in the best interests of Neenah and its stockholders and was expected to create significant value for Neenah and its stockholders.

At the continued meeting on March 27, 2022, following these executive sessions, the full Neenah board of directors then reconvened and, following these discussions and the delivery of the presentations, and after careful review and discussion by the Neenah board of directors, including discussion and consideration of the factors described below under the heading “The Merger—Neenah’s Reasons for the Merger; Recommendation of Neenah’s Board of Directors” beginning on page 92, the Neenah board of directors unanimously (i) determined that the merger agreement and the transactions contemplated thereby, including the merger, were advisable, fair to and in the best interests of Neenah and its stockholders, (ii) approved and adopted the merger agreement and the execution, delivery and performance by Neenah of the merger agreement and the transactions contemplated thereby, including the merger, (iii) recommended that Neenah’s stockholders approve and adopt the merger agreement and the transactions contemplated thereby, including the merger and (iv) resolved to submit the merger agreement and the merger to a vote of the stockholders of Neenah at a special meeting thereof.

Also on March 27, 2022, the SWM board of directors held a meeting with SWM management and representatives of King & Spalding and J.P. Morgan present.

Representatives of J.P. Morgan reviewed with the SWM board of directors J.P. Morgan’s financial analyses of the exchange ratio of 1.358 shares of SWM common stock for each share of Neenah common stock in the proposed merger and, following discussion, rendered to the SWM board of directors J.P. Morgan’s oral opinion, which was subsequently confirmed by delivery to the SWM board of directors of a written opinion dated March 27, 2022, to the effect that as of such date and based upon and subject to the various factors and assumptions made, procedures followed, matters considered and the qualifications and limitations on the scope of review undertaken by J.P. Morgan set forth in its written opinion, the exchange ratio was fair, from a financial point of view, to SWM. For a detailed discussion of J.P. Morgan’s opinion, see the section entitled “Opinion of SWM’s Financial Advisor” beginning on page 83. Also at the meeting, representatives of King & Spalding reviewed with the board the final terms of the merger agreement and related transaction documents, as well as the SWM board of director’s fiduciary duties in the context of the proposed transaction, as they had previously done.

Following these discussions and the delivery of the presentations, and after careful review and discussion by the SWM board of directors, including consideration of the factors described below under the heading “SWM’s Reasons for the Merger; Recommendation of SWM’s Board of Directors” beginning on page 80, the SWM board of directors unanimously determined that the merger agreement and the transactions contemplated thereby were advisable and in the best interests of SWM and its stockholders and approved the merger agreement and the transactions contemplated thereby.

 

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On the morning of March 28, 2022, SWM and Neenah executed and delivered the merger agreement, and the transaction was announced before opening of trading on the New York Stock Exchange.

SWM’s Reasons for the Merger; Recommendation of SWM’s Board of Directors

On March 27, 2022, the SWM board of directors unanimously (i) approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger, (ii) determined that the merger agreement and the transactions contemplated thereby are fair to, and in the best interests of, SWM and its stockholders and (iii) resolved to recommend that the SWM stockholders approve the SWM share issuance proposal. In reaching these decisions, the SWM board of directors conducted a thorough evaluation of the merger agreement, the merger and the other transactions contemplated by the merger agreement in consultation with SWM management, as well as SWM’s financial and legal advisors, and considered a significant amount of information and a number of factors, including the factors set forth below (which are presented below in no particular order and which were neither ranked nor weighted in any manner by the SWM board of directors):

 

   

each of SWM’s, Neenah’s and the combined company’s business, operations, financial condition, asset quality, earnings, and prospects, and in reviewing these factors, the SWM board of directors considered Neenah’s financial condition, that Neenah’s business and operations complement those of SWM, and that the merger and the other transactions contemplated by the merger agreement would create a global leader in the specialty materials industry with significant scale and an exceptional financial profile, including a more diversified balance sheet, revenue streams and overall business mix, than SWM on a stand-alone basis;

 

   

the strategic rationale for the merger, including the opportunity to further SWM’s position as a global leader in the specialty materials industry with a broad portfolio of product solutions, including enhanced exposure to growing, global end-markets with clear megatrends of clean air and water, health and wellness, sustainability, and advanced protective solutions and complementary capabilities in key categories including filtration, healthcare, tape, packaging, release liners, and adhesive solutions;

 

   

the SWM board of directors’ belief that Neenah’s earnings and prospects, and the synergies potentially available in the proposed merger, which included the SWM board of directors’ expectation that the merger will deliver at least $65 million of annual run-rate cost synergies upon completion of the integration, would create the opportunity for the combined company to have enhanced future earnings and prospects compared to SWM’s earnings and prospects on a stand-alone basis;

 

   

the complementary nature of the cultures of the two companies, including with respect to corporate purpose, strategic focus, target markets, client service and focus on innovation and people, and the belief of SWM’s management that the complementary cultures will facilitate the successful integration and implementation of the transaction;

 

   

the SWM board of directors’ expectation that the combined company will have the ability to leverage the scale and financial capabilities of the combined company to make additional investments in innovation and technology and to address competition and disruption in the specialty materials industry and enhance customer offerings;

 

   

the pro forma financial profile of the combined company, which is expected to provide flexibility to invest in innovation, pursue strategic acquisitions and return capital to stockholders;

 

   

the terms and conditions of the merger agreement, including:

 

   

the provisions of the merger agreement setting forth the corporate governance of the combined company, including that Dr. Rogers would serve as the non-executive Chairman of the board of directors of the combined company, and that the combined company’s board of directors would be composed of a majority SWM directors (consisting of Dr. Rogers, Dr. Ritrievi, Mr. Warlick, Mr. Keenan and Mr. Levi), each of which the SWM board of directors believes enhances the likelihood that the strategic benefits that SWM expects to achieve as a result of the merger will be realized;

 

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the fact that the exchange ratio is fixed, with no adjustment in the merger consideration to be received by Neenah stockholders as a result of possible increases or decreases in the trading price of Neenah’s or SWM’s stock following the announcement of the merger, which the SWM board of directors believed was consistent with market practice for transactions of this type and with the strategic purpose of the transaction;

 

   

the customary and reciprocal nature of the representations, warranties and covenants of SWM and Neenah in the merger agreement;

 

   

the flexibility permitted under the interim operating covenants which restrict the conduct of Neenah’s business prior to closing of the merger, and the fact that SWM is subject to substantially similar provisions;

 

   

the parties’ covenants to use their respective reasonable best efforts to obtain regulatory approvals, including the commitment of the parties to agree to divestitures or other remedies (other than divestitures or remedies that, individually or in the aggregate, would reasonably be expected to be material and adverse to SWM and its subsidiaries, taken as a whole (after giving effect to the merger), and including the projected synergies expected to result therefrom);

 

   

the deal protection and termination provisions of the merger agreement, including SWM’s right to receive the termination fee of $24 million if the merger agreement is terminated under certain circumstances, including (i) in the event that the Neenah board of directors no longer recommends that Neenah stockholders vote “FOR” the proposal to approve the merger agreement or (ii) in the event that Neenah breaches its no-shop or related covenants in any material respects; and

 

   

the review of the SWM board of directors, with the assistance of SWM’s advisors, of the terms and conditions of other recent comparable transactions and its overall belief that the terms of the merger agreement were consistent with market practice and in the best interest of SWM and its stockholders;

 

   

that SWM stockholders as of immediately prior to the completion of the merger will collectively own approximately 58% of the outstanding shares of the combined company immediately after the merger (on a fully diluted basis);

 

   

its understanding of the current and prospective environment in which SWM and Neenah operate, including national, international and local economic conditions, and the likely effect of these factors on SWM both with and without the merger;

 

   

historical information concerning each of SWM’s and Neenah’s respective businesses, financial condition, results of operations, earnings, trading prices, management, competitive positions and prospects on a stand-alone basis and on a forecasted combined basis;

 

   

its review and discussions with SWM management concerning the due diligence examination of the operations, financial condition and prospects of Neenah;

 

   

the anticipated effect of the merger on customers and employees of SWM;

 

   

the alternatives reasonably available to SWM, including an acquisition of or merger with another company or continuation on a stand-alone basis, and the potential value to SWM that might result from such alternatives, including the timing and likelihood of accomplishing and creating value in such alternatives, and the assessment of the SWM board of directors that none of these alternatives was reasonably likely to result in greater value for SWM than the merger;

 

   

its review with its outside legal advisor, King & Spalding, of the terms of the merger agreement, including the tax treatment, deal protection and termination provisions;

 

   

the oral opinion of J.P. Morgan, SWM’s financial advisor, to the SWM board of directors, subsequently confirmed by delivery to the SWM board of directors of a written opinion, dated

 

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March 27, 2022, to the effect that, as of such date and based upon and subject to the various factors and assumptions made, procedures followed, matters considered and the qualifications and limitations on the scope of review undertaken by J.P. Morgan set forth in its written opinion, the exchange ratio in the proposed merger was fair, from a financial point of view, to SWM, as more fully described below in the section entitled “—Opinion of SWM’s Financial Advisor”;

 

   

the fact that the merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes;

 

   

the fact that SWM obtained committed financing to potentially refinance certain indebtedness and pay other expenses in connection with the transaction; and

 

   

the likelihood that the merger would be completed, including after consideration of the risks related to certain conditions and regulatory approvals which will be required to complete the transactions contemplated by the merger agreement.

The SWM board of directors also considered the potential risks and negative factors related to the merger but concluded that the anticipated benefits of the merger were likely to substantially outweigh these risks and negative factors. These potential risks and negative factors included:

 

   

the possibility of encountering difficulties in achieving anticipated cost synergies and savings in the amounts estimated or in the time frame contemplated;

 

   

the possibility of encountering difficulties in successfully integrating Neenah’s business, operations and workforce with those of SWM;

 

   

the risk of losing key SWM or Neenah employees during the pendency of the merger and thereafter;

 

   

the risk that the requisite regulatory approvals or the requisite approvals of the Neenah stockholders and SWM stockholders might not be obtained and, as a result, the merger may not be completed;

 

   

the risk that governmental entities may impose requirements on the combined company that may adversely affect the ability of the combined company to realize some of the expected benefits of the merger;

 

   

the diversion of management attention and resources from the operation of SWM’s business towards the completion of the merger;

 

   

the fact that certain provisions of the merger agreement, although reciprocal, may have the effect of discouraging proposals for alternative transactions involving SWM, including: (i) the restriction on SWM’s ability to solicit proposals for alternative transactions; (ii) the requirement that the SWM board of directors submit the SWM share issuance proposal to the SWM stockholders for approval in certain circumstances, even if it withdraws its recommendation for the SWM share issuance proposal; and (iii) the requirement that SWM pay a termination fee of $24 million to Neenah in certain circumstances following the termination of the merger agreement;

 

   

the terms of the merger agreement that restrict SWM’s ability to operate its business outside of the ordinary course before the closing of the merger;

 

   

the risk that, if Neenah pays SWM the $24 million termination fee pursuant to the merger agreement in certain circumstances following the termination of the merger agreement, as more fully described below in the section entitled “The Merger Agreement—Termination Fee”, such fee does not sufficiently compensate SWM for adverse effects arising out of the termination of the merger agreement;

 

   

the fees and costs associated with completing the merger; and

 

   

various other risks associated with the merger of the type and nature described under the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” beginning on pages 38 and 35, respectively.

 

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The SWM board of directors considered all of the factors and concluded that the uncertainties, risks and potential negative factors relevant to the merger were outweighed by the potential benefits that it expected would be achieved as a result of the merger.

This discussion of the information and factors considered by the SWM board of directors includes the principal positive and negative factors considered by the SWM board of directors, but is not intended to be exhaustive and may not include all of the factors considered by the SWM board of directors. In view of the wide variety of factors considered in connection with its evaluation of the merger agreement and the merger, and the complexity of these matters, the SWM board of directors did not find it useful to and did not attempt to quantify, rank or otherwise assign relative or specific weights to the various factors that it considered in reaching its determination to adopt and approve the merger agreement, the merger and the other transactions contemplated by the merger agreement. Rather, the SWM board of directors viewed its determination and recommendation as being based on the totality of the information presented to it and the factors it considered. In addition, individual members of the SWM board of directors may have given differing weights to different factors. It should be noted that this explanation of the reasoning of the SWM board of directors and certain information presented in this section is forward-looking in nature and, therefore, that information should be read in light of the factors discussed in the section entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 35.

In considering the recommendation of the SWM board of directors, you should be aware that certain directors and executive officers of SWM may have interests in the merger that are different from, or in addition to, interests of stockholders of SWM generally, which may create potential conflicts of interest. The SWM board of directors was aware of these interests and considered them when evaluating and negotiating the merger agreement, the merger and the other transactions contemplated by the merger agreement, and in recommending to SWM’s stockholders that they vote in favor of the SWM share issuance proposal and the SWM adjournment proposal. See the section entitled “The Merger—Interests of SWM’s Directors and Executive Officers in the Merger” beginning on page 107.

For the reasons set forth above, the SWM board of directors unanimously recommends that the SWM stockholders vote “FOR” the SWM share issuance proposal and “FOR” the SWM adjournment proposal.

Opinion of SWM’s Financial Advisor

Pursuant to an engagement letter, SWM retained J.P. Morgan as its financial advisor in connection with the proposed merger.

At the meeting of the SWM board of directors on March, 27, 2022 at which the merger agreement was approved, J.P. Morgan rendered its oral opinion to the SWM board of directors, subsequently confirmed by delivery to the SWM board of directors of a written opinion, dated March 27, 2022, to the effect that, as of such date and based upon and subject to the various factors and assumptions made, procedures followed, matters considered and the qualifications and limitations on the scope of review undertaken by J.P. Morgan set forth in its written opinion, the exchange ratio in the proposed merger was fair, from a financial point of view, to SWM.

The full text of the written opinion of J.P. Morgan dated March 27, 2022, which sets forth, among other things, the assumptions made, matters considered and limits on the review undertaken, is attached as Annex B to this joint proxy statement/prospectus and is incorporated herein by reference. The summary of the opinion of J.P. Morgan set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of such opinion. SWM’s stockholders are urged to read the opinion in its entirety. J.P. Morgan’s written opinion was addressed to the SWM board of directors (in its capacity as such) in connection with and for the purposes of its evaluation of the proposed merger, was directed only to the fairness, from a financial point of view, of the exchange ratio in the proposed merger to SWM and did not address any other aspect of the merger. J.P. Morgan expressed no opinion as to the fairness of the exchange ratio to the holders of any class of securities, creditors or other constituencies of SWM or as to the underlying decision by SWM to engage in the proposed merger. The issuance of J.P. Morgan’s opinion was approved by a fairness committee of J.P. Morgan. The opinion

 

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does not constitute a recommendation to any stockholder of SWM as to how such stockholder should vote with respect to the proposed merger or any other matter.

In arriving at its opinions, J.P. Morgan, among other things:

 

   

reviewed a March 27, 2022 draft of the merger agreement;

 

   

reviewed certain publicly available business and financial information concerning SWM and Neenah and the industries in which they operate;

 

   

compared the financial and operating performance of SWM and Neenah with publicly available information concerning certain other companies J.P. Morgan deemed relevant and reviewed the current and historical market prices of the SWM common stock and the Neenah common stock and certain publicly traded securities of such other companies;

 

   

reviewed certain internal financial analyses and forecasts prepared by or at the direction of SWM’s management relating to the businesses of SWM and Neenah, as well as the estimated amount and timing of cost savings and related expenses and synergies expected to result from the merger (which we refer to as the “Synergies” in this section); and

 

   

performed such other financial studies and analyses and considered such other information as J.P. Morgan deemed appropriate for the purposes of its opinion.

In addition, J.P. Morgan held discussions with certain members of the management of SWM and Neenah with respect to certain aspects of the merger, and the past and current business operations of SWM and Neenah, the financial condition and future prospects and operations of SWM and Neenah, the effects of the merger on the financial condition and future prospects of SWM and Neenah, and certain other matters J.P. Morgan believed necessary or appropriate to its inquiry.

In giving its opinion, J.P. Morgan relied upon and assumed the accuracy and completeness of all information that was publicly available or was furnished to or discussed with J.P. Morgan by SWM and Neenah or otherwise reviewed by or for J.P. Morgan, and J.P. Morgan did not independently verify (and did not assume responsibility or liability for independently verifying) any such information or its accuracy or completeness. J.P. Morgan did not conduct or was not provided with any valuation or appraisal of any assets or liabilities, nor did J.P. Morgan evaluate the solvency of SWM or Neenah under any applicable laws relating to bankruptcy, insolvency or similar matters. In relying on financial analyses and forecasts provided to J.P. Morgan or derived therefrom, including the Synergies, J.P. Morgan assumed that they were reasonably prepared based on assumptions reflecting the best currently available estimates and judgments by management as to the expected future results of operations and financial condition of SWM and Neenah to which such analyses or forecasts relate. J.P. Morgan expressed no view as to such analyses or forecasts (including the Synergies) or the assumptions on which they were based. J.P. Morgan also assumed that the merger will qualify as a tax-free reorganization for United States federal income tax purposes and will be consummated as described in the merger agreement, and that the definitive merger agreement would not differ in any material respect from the draft thereof provided to J.P. Morgan. J.P. Morgan also assumed that the representations and warranties made by SWM, Merger Sub and Neenah in the merger agreement and the related agreements were and will be true and correct in all respects material to its analysis. J.P Morgan is not a legal, regulatory or tax expert and relied on the assessments made by advisors to SWM with respect to such issues. J.P. Morgan further assumed that all material governmental, regulatory or other consents and approvals necessary for the consummation of the merger will be obtained without any adverse effect on SWM or Neenah or on the contemplated benefits of the merger.

The projections furnished to J.P. Morgan were prepared by SWM’s management. SWM does not publicly disclose internal management projections of the type provided to J.P. Morgan in connection with J.P. Morgan’s analysis of the proposed merger, and such projections were not prepared with a view toward public disclosure. These projections were based on numerous variables and assumptions that are inherently uncertain and may be

 

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beyond the control of SWM’s management, including, without limitation, factors related to general economic and competitive conditions and prevailing interest rates. Accordingly, actual results could vary significantly from those set forth in such projections. For more information regarding the use of projections and other forward-looking statements, please refer to the section entitled “Certain Unaudited Prospective Financial Information” beginning on page 103 of this joint proxy statement/prospectus.

J.P. Morgan’s opinion was necessarily based on economic, market and other conditions as in effect on, and the information made available to J.P. Morgan as of, the date of such opinion. J.P. Morgan’s opinion noted that subsequent developments may affect J.P. Morgan’s opinion, and that J.P. Morgan does not have any obligation to update, revise, or reaffirm such opinion. J.P. Morgan’s opinion is limited to the fairness, from a financial point of view, to SWM of the exchange ratio in the proposed merger, and J.P. Morgan has expressed no opinion as to the fairness of the exchange ratio to the holders of any class of securities, creditors or other constituencies of SWM or the underlying decision by SWM to engage in the merger. Furthermore, J.P. Morgan expressed no opinion with respect to the amount or nature of any compensation to any officers, directors, or employees of any party to the proposed merger, or any class of such persons relative to the exchange ratio in the proposed merger or with respect to the fairness of any such compensation. J.P. Morgan expressed no opinion as to the price at which SWM’s common stock or Neenah’s common stock will trade at any future time.

In accordance with customary investment banking practice, J.P. Morgan employed generally accepted valuation methodologies in rendering its opinion to the SWM board of directors on March 27, 2022. The following is a summary of the material financial analyses utilized by J.P. Morgan and contained in the presentation delivered to the SWM board of directors on such date in connection with the rendering of such opinion. It does not purport to be a complete description of the analyses or data presented by J.P. Morgan. Some of the summaries of the financial analyses include information presented in tabular format. The tables are not intended to stand alone, and in order to more fully understand the financial analyses used by J.P. Morgan, the tables must be read together with the full text of each summary. Considering the data set forth below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of J.P. Morgan’s analyses.

 

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SWM Analysis

Public Trading Multiples

Using publicly available information, J.P. Morgan compared selected financial data of SWM with similar data for selected publicly traded companies engaged in businesses which J.P. Morgan judged to be analogous to SWM, including Neenah. These companies were selected, among other reasons, because they are publicly traded companies with operations and businesses that, for purposes of J.P. Morgan’s analyses, were, in J.P. Morgan’s judgment, considered sufficiently similar to that of SWM based on business sector participation, financial metrics and form of operations. None of the selected companies reviewed is identical to SWM and certain of these companies may have characteristics that are materially different from that of SWM. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the companies differently than they would affect SWM. The information J.P. Morgan presented included the multiple of firm value (calculated as equity value plus, or minus, as applicable, net debt or net cash) to estimates of calendar years 2022 and 2023 EBITDA for the applicable company, which we refer to as FV/EBITDA in this section of the joint proxy statement/prospectus. Financial data for the selected companies were based on the selected companies’ filings with the SEC and publicly available equity research analysts’ consensus estimates for calendar years 2022 and 2023. Results of this analysis were presented for the selected companies, as indicated in the following table:

 

Company

   2022E
FV/EBITDA
     2023E
FV/EBITDA
 

Neenah

     7.9x        6.3x  

Advanced Materials

     

Berry Global

     7.5x        7.2x  

Glatfelter

     8.2x        5.9x  

Median

     7.8x        6.5x  

Average

     7.8x        6.5x  

Paper

     

Mondi plc

     6.9x        6.7x  

Overall median

     7.7x        6.5x  

Overall average

     7.6x        6.5x  

Based on the above analysis and on other factors J.P. Morgan considered appropriate, including current and historical trading multiples, J.P. Morgan selected for SWM an FV/2022E EBITDA multiple reference range of 7.0x to 8.5x and an FV/2023E EBITDA multiple reference range of 6.0x to 7.5x. These ranges were then applied to SWM’s estimated 2022 EBITDA and estimated 2023 EBITDA, yielding ranges of implied equity values for SWM’s common stock of approximately $21.60 to $33.80 per share and $16.20 to $29.00 per share, respectively (in each case, rounded to the nearest $0.10), as compared to the closing price per share of SWM common stock of $30.23 on March 25, 2022.

Discounted Cash Flow Analysis

J.P. Morgan conducted a discounted cash flow analysis for the purpose of determining the fully diluted implied equity value per share for SWM’s common stock. J.P. Morgan calculated the unlevered free cash flows that SWM is expected to generate during the second half of fiscal year 2022 through fiscal year 2031 (applying a valuation date of June 30, 2022) based upon the prospective financial information used by J.P. Morgan described in “The Merger – Certain Unaudited Prospective Financial Information – SWM prospective financial information.” J.P. Morgan also calculated a range of terminal values of SWM at December 31, 2031 by applying a perpetual growth rate ranging from 1.0% to 2.0% of the unlevered free cash flow of SWM for the calendar year 2031. The unlevered free cash flows and the range of terminal asset values were then discounted to present values using a range of discount rates from 8.25% to 9.25%, which were chosen by J.P. Morgan based upon an

 

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analysis of the weighted average cost of capital of SWM. Based on the foregoing, the discounted cash flow analysis indicated a range of implied equity values of between $37.10 and $53.80, rounded to the nearest $0.10, per share of SWM’s common stock on a stand-alone basis, as compared to the closing price per share of SWM common stock of $30.23 on March 25, 2022.

Other Information

SWM Historical Trading Range

J.P. Morgan reviewed the trading prices for the shares of SWM common stock for the 52-week period ending March 25, 2022, which ranged from $27.91 per share to $50.63 per share, as compared to the closing price per share of SWM common stock of $30.23 on March 25, 2022. J.P. Morgan noted that historical trading range analyses were presented merely for reference purposes only, and were not relied upon for valuation purposes.

SWM Analyst Price Target

J.P. Morgan reviewed the publicly available equity research analyst share price targets for the shares of SWM common stock and noted that the single analyst price target was $60.00 per share, as compared to the closing price per share of SWM common stock of $30.23 on March 25, 2022. J.P. Morgan noted that the analyst price target was presented merely for reference purposes only, and was not relied upon for valuation purposes.

 

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Neenah Analysis

Public Trading Multiples

Using publicly available information, J.P. Morgan compared selected financial data of Neenah with similar data for selected publicly traded companies engaged in businesses which J.P. Morgan judged to be analogous to Neenah, including SWM. These companies were selected, among other reasons, because they are publicly traded companies with operations and businesses that, for purposes of J.P. Morgan’s analyses, were, in J.P. Morgan’s judgment, considered sufficiently similar to that of Neenah based on business sector participation, financial metrics and form of operations. None of the selected companies reviewed is identical to Neenah and certain of these companies may have characteristics that are materially different from that of Neenah. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the companies differently than they would affect Neenah. The information J.P. Morgan presented included the multiple of firm value (calculated as equity value plus, or minus, as applicable, net debt or net cash) to estimates of calendar years 2022 and 2023 EBITDA for the applicable company, which we refer to as FV/EBITDA in this section of the joint proxy statement/prospectus. Financial data for the selected companies were based on the selected companies’ filings with the SEC and publicly available equity research analysts’ consensus estimates for calendar years 2022 and 2023. Results of this analysis were presented for the selected companies, as indicated in the following table:

 

Company

   2022E
FV/EBITDA
     2023E
FV/EBITDA
 

SWM

     8.3x        7.4x  

Advanced Materials

     

Berry Global

     7.5x        7.2x  

Glatfelter

     8.2x        5.9x  

Median

     7.8x        6.5x  

Average

     7.8x        6.5x  

Paper

     

Mondi plc

     6.9x        6.7x  

Graphic Packaging

     7.9x        7.5x  

Median

     7.4x        7.1x  

Average

     7.4x        7.1x  

Overall median

     7.9x        7.2x  

Overall average

     7.7x        6.9x  

Based on the above analysis and on other factors J.P. Morgan considered appropriate, including current and historical trading multiples, J.P. Morgan selected for Neenah an FV/2022E EBITDA multiple reference range of 7.0x to 8.5x and an FV/2023E EBITDA multiple reference range of 6.0x to 7.5x. These ranges were then applied to Neenah’s estimated 2022 EBITDA and estimated 2023 EBITDA, yielding ranges of implied equity values for Neenah’s common stock of approximately $34.60 to $47.30 per share and $33.50 to $48.00 per share, respectively (in each case, rounded to the nearest $0.10), as compared to the closing price per share of Neenah common stock of $38.21 on March 25, 2022.

Discounted Cash Flow Analysis

J.P. Morgan conducted a discounted cash flow analysis for the purpose of determining the fully diluted implied equity value per share for Neenah’s common stock. J.P. Morgan calculated the unlevered free cash flows that Neenah is expected to generate during the second half of fiscal year 2022 through fiscal year 2031 (applying a valuation date of June 30, 2022) based upon the prospective financial information used by J.P. Morgan described in “The Merger – Certain Unaudited Prospective Financial Information – Neenah prospective financial information.” J.P. Morgan also calculated a range of terminal values of Neenah at December 31, 2031 by

 

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applying a perpetual growth rate ranging from 1.0% to 2.0% of the unlevered free cash flow of Neenah for the calendar year 2031. The unlevered free cash flows and the range of terminal asset values were then discounted to present values using a range of discount rates from 7.75% to 8.75%, which were chosen by J.P. Morgan based upon an analysis of the weighted average cost of capital of Neenah. Based on the foregoing, the discounted cash flow analysis indicated a range of implied equity values of between $51.40 and $70.80, rounded to the nearest $0.10, per share of Neenah’s common stock on a stand-alone basis, as compared to the closing price per share of Neenah common stock of $38.21 on March 25, 2022.

Other Information

Neenah Historical Trading Range

J.P. Morgan reviewed the trading prices for the shares of Neenah common stock for the 52-week period ending March 25, 2022, which ranged from $31.46 per share to $57.23 per share, as compared to the closing price per share of Neenah common stock of $38.21 on March 25, 2022. J.P. Morgan noted that historical trading range analyses were presented merely for reference purposes only, and were not relied upon for valuation purposes.

Neenah Analyst Price Targets

J.P. Morgan reviewed the publicly available equity research analyst share price targets for the shares of Neenah common stock and noted that analyst price targets were $64.00 to $65.00 per share, as compared to the closing price per share of Neenah common stock of $38.21 on March 25, 2022. J.P. Morgan noted that the analyst price targets were presented merely for reference purposes only, and were not relied upon for valuation purposes.

Relative Valuation Exchange Ratio Analysis

Public Trading Multiples

J.P. Morgan compared the results for SWM to the results for Neenah with respect to the FV/EBITDA and FV/EBITDA multiples for fiscal years 2022 and 2023 in “The Merger—Opinion of SWM’s Financial Advisor—SWM Analysis—Public Trading Multiples” and “The Merger—Opinion of SWM’s Financial Advisor—Neenah Analysis—Public Trading Multiples” described above to determine a range of implied exchange ratios. Specifically, J.P. Morgan compared (i) the lowest implied equity value per share for SWM to the highest implied equity value per share for Neenah, and (ii) the highest implied equity value per share for SWM to the lowest implied equity value per share for Neenah, to derive the range of exchange ratios implied by the public trading multiples analyses. The analysis resulted in a range of implied exchange ratios of 1.024x to 2.190x for FV/2022E EBITDA multiples and 1.155x to 2.963x for FV/2023E EBITDA multiples as compared to the exchange ratio of 1.358x.

Discounted Cash Flow Analysis

J.P. Morgan compared the results for SWM to the results for Neenah with respect to the discounted cash flow analyses in “The Merger—Opinion of SWM’s Financial Advisor—SWM Analysis—Discounted Cash Flow Analysis” and “The Merger—Opinion of SWM’s Financial Advisor—Neenah Analysis—Discounted Cash Flow Analysis” described above to determine a range of implied exchange ratios. Specifically, J.P. Morgan compared (i) the lowest implied equity value per share for SWM to the highest implied equity value per share for Neenah, and (ii) the highest implied equity value per share for SWM to the lowest implied equity value per share for Neenah, to derive the range of exchange ratios implied by the discounted cash flow analyses. The analysis resulted in a range of implied exchange ratios of 0.955x to 1.908x, as compared to the exchange ratio of 1.358x.

Implied Historical Exchange Ratio

J.P. Morgan divided the price per share of Neenah common stock by the price per share of SWM common stock for each day of the 52-week period ending March 25, 2022 to determine a range of implied exchange ratios for

 

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the transaction, which was 1.046x per share to 1.737x per share, as compared to the exchange ratio of 1.358x. J.P. Morgan noted that implied historical exchange ratio analysis was presented merely for reference purposes only, and was not relied upon for valuation purposes.

Implied Analyst Price Targets Exchange Ratio

J.P. Morgan divided the single analyst price target per share of SWM common stock by the low and high analyst price targets per share of Neenah common stock to determine a range of implied exchange ratios for the transaction, which was 1.067x per share to 1.083x per share, as compared to the exchange ratio of 1.358x. J.P. Morgan noted that implied analyst price targets exchange ratio analysis was presented merely for reference purposes only, and was not relied upon for valuation purposes.

Illustrative Value Creation Analysis

Based on Market Value

For reference only and not as a component of its fairness analysis, J.P. Morgan conducted an illustrative value creation analysis that compared the closing market value of SWM common stock on March 25, 2022 to the pro forma combined company implied equity value following the merger. J.P. Morgan determined the pro forma combined company implied equity value by calculating the sum of: (i) the public market equity value of SWM as of March 25, 2022, (ii) the public market equity value of Neenah as of March 25, 2022, (iii) the capitalized value of SWM management’s estimate of $65.0 million of annual run-rate synergies calculated by applying the 7.8 blended firm value / 2022E EBITDA multiple, reduced by SWM management’s estimate of $18.0 million costs to achieve the synergies to be incurred through 2025, plus $25.0 million in total cash release in the first three (3) years after the closing, and (iv) negative $59.0 million in estimated transaction costs. The analysis indicated that the illustrative market-based value creation at the exchange ratio yielded value accretion to holders of SWM common stock of approximately $238 million. There can be no assurance, however, that the synergies or estimated costs to achieve such synergies will not be substantially greater or less than SWM management’s estimates.

Based on Discounted Cash Flow

J.P. Morgan conducted an illustrative value creation analysis that compared the implied equity value of SWM common stock derived from a discounted cash flow valuation on a stand-alone basis to the pro forma combined company implied equity value. J.P. Morgan determined the pro forma combined company equity value by calculating the sum of: (i) the implied equity value of SWM using the midpoint value determined in J.P. Morgan’s discounted cash flow analysis described above in “The Merger—Opinion of SWM’s Financial Advisor—SWM Analysis—Discounted Cash Flow Analysis,” (ii) the implied equity value of Neenah using the midpoint value determined in J.P. Morgan’s discounted cash flow analysis described above in “The Merger—Opinion of SWM’s Financial Advisor—Neenah Analysis—Discounted Cash Flow Analysis,” (iii) the present value of the synergies calculated by discounting SWM management’s estimate of $65.0 million of annual run-rate synergies, reduced by SWM management’s estimate of $18.0 million costs to achieve such synergies to be incurred through 2025, plus $25.0 million total cash release in the first three (3) years after closing, using a blended discount rate of 8.50%, and (iv) negative $59.0 million in estimated transaction costs. The analysis indicated that the illustrative value creation at the exchange ratio yielded value accretion to holders of SWM common stock of $298 million. There can be no assurance, however, that the estimated synergies or estimated costs to achieve such synergies will not be substantially greater or less than SWM management’s estimates.

Miscellaneous.

The foregoing summary of certain material financial analyses does not purport to be a complete description of the analyses or data presented by J.P. Morgan. The preparation of a fairness opinion is a complex process and is

 

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not necessarily susceptible to partial analysis or summary description. J.P. Morgan believes that the foregoing summary and its analyses must be considered as a whole and that selecting portions of the foregoing summary and these analyses, without considering all of its analyses as a whole, could create an incomplete view of the processes underlying the analyses and its opinion. As a result, the ranges of valuations resulting from any particular analysis or combination of analyses described above were merely utilized to create points of reference for analytical purposes and should not be taken to be the view of J.P. Morgan with respect to the actual value of SWM or Neenah. The order of analyses described does not represent the relative importance or weight given to those analyses by J.P. Morgan. In arriving at its opinion, J.P. Morgan did not attribute any particular weight to any analyses or factors considered by it and did not form an opinion as to whether any individual analysis or factor (positive or negative), considered in isolation, supported or failed to support its opinion. Rather, J.P. Morgan considered the totality of the factors and analyses performed in determining its opinion.

Analyses based upon forecasts of future results are inherently uncertain, as they are subject to numerous factors or events beyond the control of the parties and their advisors. Accordingly, forecasts and analyses used or made by J.P. Morgan are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by those analyses. Moreover, J.P. Morgan’s analyses are not and do not purport to be appraisals or otherwise reflective of the prices at which businesses actually could be acquired or sold. None of the selected companies reviewed as described in the above summary is identical to SWM or Neenah. However, the companies selected were chosen because they are publicly traded companies with operations and businesses that, for purposes of J.P. Morgan’s analysis, may be considered similar to those of SWM and Neenah. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the companies compared to SWM and Neenah.

As a part of its investment banking business, J.P. Morgan and its affiliates are continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, investments for passive and control purposes, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements, and valuations for corporate and other purposes. J.P. Morgan was selected to advise SWM with respect to the Merger on the basis of, among other things, such experience and its qualifications and reputation in connection with such matters and its familiarity with SWM, Neenah and the industries in which they operate.

SWM has agreed to pay J.P. Morgan a total transaction fee of $8.0 million, $3.0 million of which became payable to J.P. Morgan in connection with delivery by J.P. Morgan of its opinion, and the remainder of which becomes payable upon the completion of the merger. In addition, SWM may, in its sole discretion, based on its assessment of J.P. Morgan’s performance of its services, pay J.P. Morgan an additional fee of $2.0 million upon the completion of the merger. In addition, SWM has agreed to reimburse J.P. Morgan for its expenses incurred in connection with its services, including the fees and disbursements of counsel, and will indemnify J.P. Morgan against certain liabilities arising out of J.P. Morgan’s engagement. During the two (2) years preceding the date of J.P. Morgan’s opinion, J.P. Morgan and its affiliates have had commercial or investment banking relationships with SWM and Neenah for which J.P. Morgan and such affiliates have received customary compensation. Such services during such period have included acting as joint lead arranger and bookrunner on SWM’s credit facilities in February 2021 and January 2021, as well as financial advisor to SWM in connection with its acquisition of Scapa Group plc, which closed in April 2021. Such services for Neenah during such period have included acting as sole lead arranger and bookrunner on a credit facility in November 2021 and joint lead arranger and bookrunner on credit facilities in April 2021 and June 2020. In addition, J.P. Morgan’s commercial banking affiliate is an agent bank and a lender under outstanding credit facilities of SWM and Neenah, for which it receives customary compensation or other financial benefits. J.P. Morgan anticipates that it and its affiliates will arrange and/or provide financing to SWM in connection with the merger for customary compensation. During the two-year period preceding delivery of its opinion, the aggregate fees recognized by J.P. Morgan from SWM were in the range of $9.1 million to $10.8 million and from Neenah were in the range of $5.0 million to $7.05 million. J.P. Morgan and its affiliates hold, on a proprietary basis, less than 1% of the outstanding common stock of each of SWM and Neenah. In the ordinary course of their businesses, J.P. Morgan and its affiliates may

 

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actively trade the debt and equity securities or financial instruments (including derivatives, bank loans or other obligations) of SWM or Neenah for their own accounts or for the accounts of customers and, accordingly, they may at any time hold long or short positions in such securities or other financial instruments.

Neenah’s Reasons for the Merger; Recommendation of Neenah’s Board of Directors

On March 27, 2022, the Neenah board of directors unanimously (i) determined that the merger agreement and the transactions contemplated thereby, including the merger, were advisable, fair to and in the best interests of Neenah and its stockholders, (ii) approved and adopted the merger agreement and the execution, delivery and performance by Neenah of the merger agreement and the transactions contemplated thereby, including the merger, and (iii) recommended that Neenah’s stockholders approve the merger proposal. In reaching these decisions, the Neenah board of directors, in consultation with management and Neenah’s legal and financial advisors, conducted a thorough evaluation of the merger agreement, the merger and the other transactions contemplated thereby, and considered a significant amount of information and a number of factors, including the factors set forth below. The following factors are presented in no particular order of importance:

 

   

the all-stock nature of the merger will provide Neenah stockholders with an ownership stake in the combined company, which will allow Neenah’s stockholders to participate in the anticipated increase in value of the combined company expected to result from a number of significant strategic opportunities and benefits, including the following:

 

   

the belief that Neenah and SWM have complementary strategic rationales and that the merger will accelerate the ability of the combined company to expand various growth platforms to create a global leader in the specialty materials industry with a stronger financial profile including a more diversified balance sheet and stronger cash generation capabilities resulting from diversified revenue streams enabling the combined company to better serve a broader customer base with an expanded product portfolio, leading technologies, innovation and global scale than Neenah would be able to achieve on a stand-alone basis;

 

   

the shared cultures of Neenah and SWM are expected to facilitate the combined company’s continued focus on employee safety, customer satisfaction, and sustainability, inclusion, corporate governance and other ESG initiatives;

 

   

the expected revenue synergies upon completion of the integration, in the form of cross selling opportunities, broader geographic reach, and increased research and development capabilities;

 

   

the projected annual run-rate cost synergies of at least $65 million expected to be achieved in 24 to 36 months following closing, in the form of organizational optimization, procurement and other supply chain efficiencies, operating cost savings, and other cost optimization opportunities; and

 

   

the larger size and scale, improved geographic diversification, greater public float, enhanced strategic optionality, financial strength, cash flow generation potential and potentially lower cost of capital of the combined company compared to Neenah on a stand-alone basis;

 

   

the view that, in light of the industry landscape and the increasing focus on scale and consolidation among key peers, Neenah would benefit from the larger size and scale and improved strategic position of the combined company;

 

   

the merger is expected to result in improved liquidity for Neenah stockholders as a result of the larger equity capitalization and stockholder base of the combined company;

 

   

the combined company’s common stock will be listed for trading on the NYSE and continue to provide liquidity for Neenah’s common stockholders desiring to liquidate their investment after the merger;

 

   

the trading price of Neenah common stock has experienced volatility and the larger scale of the combined company and greater public float may lessen the impact of overall market volatility;

 

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Neenah’s board of directors considered other alternatives that might reasonably be available to Neenah, including continuation of Neenah’s long-term strategic plan and/or an acquisition of or merger with another company (including the timing and likelihood of such alternatives creating comparable or superior long-term value for Neenah and its stockholders) and concluded that the benefits expected to be obtained from the merger are more favorable to Neenah and its stockholders than remaining as an independent company or pursuing these alternatives;

 

   

the merger agreement includes a fixed exchange ratio that will not fluctuate as a result of changes in the market price of Neenah common stock or SWM common stock, which provides certainty as to the pro forma ownership of Neenah stockholders in the combined company and allows Neenah stockholders to benefit from any increase in the trading price of SWM common stock relative to the trading price of Neenah common stock between March 28, 2022, the date of the merger agreement, and the closing of the merger;

 

   

Neenah’s ability under certain circumstances, pursuant to the merger agreement, to consider and respond to a different unsolicited written acquisition proposal, and if (i) after consultation with Neenah’s outside legal counsel and financial advisors, the Neenah board of directors determines in good faith that such acquisition proposal is a superior proposal, (ii) Neenah provides SWM with required notice and negotiates in good faith for improvements to the merger agreement, and (iii) after consultation with Neenah’s outside legal counsel and financial advisors, Neenah’s board of directors determines in good faith that a failure to do so would be reasonably likely to be inconsistent with its fiduciary duties under applicable law, the ability of Neenah’s board of directors to withdraw or otherwise change its recommendation that Neenah’s stockholders approve the adoption of the merger agreement;

 

   

Neenah’s ability to seek specific performance to require SWM to complete the merger in the event that all conditions to closing have been satisfied;

 

   

the merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code and, therefore, the SWM common stock to be received as merger consideration is not expected to be taxable to Neenah stockholders;

 

   

the review by Neenah’s board of directors with their legal and financial advisors (including the review by Neenah’s independent directors with their legal advisor) of, and advice provided by such advisors on, the structure of the merger and the financial and other terms of the merger agreement, including governance matters, conditionality and termination rights, and the belief of Neenah’s board of directors that arm’s-length negotiations between Neenah and SWM (including the direct negotiation by members of their respective boards of directors) resulted in favorable terms to Neenah and its stockholders;

 

   

the oral opinion of Perella Weinberg to the Neenah board of directors (subsequently confirmed in writing), to the effect that, as of March 27, 2022 and based upon and subject to various assumptions made, procedures followed, matters considered and qualifications and limitations set forth in the draft fairness opinion that had been provided to Neenah’s board of directors prior to the meeting, the exchange ratio provided for pursuant to the merger agreement was fair, from a financial point of view, to the Neenah stockholders (other than SWM and its affiliates), as more fully described below in the section entitled “—Opinion of Neenah’s Financial Advisor”;

 

   

the merger agreement permits Neenah to continue to pay its stockholders regular quarterly cash dividends at a rate consistent with the prior quarter’s cash dividend through the consummation of the merger;

 

   

the Neenah board of directors’ knowledge of the business, operations, financial condition, earnings and prospects of Neenah and SWM, taking into account the results of Neenah’s due diligence review of SWM, and familiarity with the current and prospective environment in which Neenah and SWM operate, including economic and market conditions;

 

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the following governance arrangements of the combined company, which Neenah’s board of directors believes will help the combined company achieve the synergies and other value creation opportunities expected to be derived from the merger and facilitate an effective and timely integration of the two companies’ operations:

 

   

Ms. Julie Schertell, Neenah’s current President and Chief Executive Officer, will serve as President and Chief Executive Officer of the combined company;

 

   

Neenah will appoint four (4) members to the combined company’s board of directors, including Ms. Schertell;

 

   

SWM will appoint five (5) members to the combined company’s board of directors, one of which will serve as the Non-Executive Chairman;

 

   

supermajority approval requirements intended to ensure that the foregoing governance provisions remain in effect until the annual meeting of the combined company’s stockholders to be held in 2025;

 

   

the merger is subject to the approval of Neenah’s stockholders, and Neenah’s stockholders have the ability to reject the merger by voting against the merger for any reason, including if a higher offer were to be made prior to the Neenah special meeting (although Neenah may be required to pay a termination fee under certain circumstances if Neenah subsequently enters into a definitive agreement relating to, or consummates, an acquisition proposal);

 

   

the relative deal certainty provided by the fact that SWM obtained a backstop financing commitment that will enable it to repay Neenah’s outstanding indebtedness in connection with the consummation of the merger; and

 

   

the likelihood that the merger will be completed, including after consideration of the risks related to the satisfaction of certain conditions to closing, including regulatory approvals.

The Neenah board of directors also considered the potential risks and negative factors in its deliberations concerning the merger, but ultimately determined that the anticipated benefits of the merger were likely to substantially outweigh these risks and negative factors. These potential risks and negative factors included:

 

   

the fact that the merger agreement does not provide for any adjustment to the merger consideration or a price-based termination right in favor of Neenah or Neenah stockholders if prior to the closing of the merger the market price of SWM common stock declines due to general market conditions, general economic conditions, or matters directly related to SWM that do not otherwise constitute a SWM material adverse effect under the merger agreement;

 

   

the challenges inherent in the combination of two independent businesses of the size and scope of Neenah and SWM, including the possibility that the revenue enhancement opportunities, cost savings, operational synergies and other benefits to the Neenah stockholders expected to result from the merger might not be realized at the times anticipated, might not be fully realized or might not be realized at all, including as a result of possible changes in the markets in which the combined company will operate or as a result of potential difficulties integrating the two companies;

 

   

the impact of government regulation and social trends on SWM’s engineered paper business, which represented approximately 31% of SWM’s net sales for 2021;

 

   

the significant costs involved in connection with entering into and completing the merger and the substantial time and effort of Neenah’s executive management team required to consummate the merger and the related disruptions in the operation of Neenah’s business;

 

   

the restrictions on the conduct of Neenah’s business contained in the merger agreement, which could delay or prevent Neenah from undertaking certain activities and capitalizing on certain business opportunities that may arise prior to the consummation of the merger;

 

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the pendency of the merger or failure to complete the merger could harm Neenah’s relationships with its employees, customers, suppliers and other business associates and constituencies and may divert the attention of Neenah’s management and employees away from the day-to-day operation of Neenah’s business;

 

   

the potential for losing key SWM or Neenah employees during the pendency of the merger and thereafter;

 

   

governmental entities may impose requirements on the combined company that may adversely affect the ability of the combined company to realize some of the expected benefits of the merger;

 

   

the provisions of the merger agreement that limit Neenah’s ability to solicit competing acquisition proposals;

 

   

the risk that Neenah would be required to pay SWM a $24 million termination fee under certain circumstances, as more fully described below in the section entitled “The Merger Agreement—Termination Fee”;

 

   

the possibility that the termination fee payable by Neenah pursuant to the merger agreement could, in certain circumstances, discourage other potential bidders from submitting a competing proposal;

 

   

the merger may not be completed, or may be unduly delayed, due to, among other reasons, the failure to obtain requisite regulatory approvals or the failure of either SWM stockholders to approve the SWM share issuance proposal or Neenah stockholders to approve the Neenah merger proposal or other reasons beyond the control of Neenah or SWM;

 

   

the provisions of the merger agreement that would prevent Neenah from terminating the merger agreement in favor of a competing proposal, even if such a proposal were determined by Neenah’s board of directors to be a superior proposal, as more fully described below in the section entitled “The Merger Agreement—Termination Fee”;

 

   

the risk that, if SWM pays Neenah the $24 million termination fee pursuant to the merger agreement in certain circumstances, such fee does not sufficiently compensate Neenah for adverse effects arising out of the termination of the merger agreement;

 

   

under the DGCL, Neenah stockholders will not be entitled to appraisal rights or similar rights of an objecting stockholder in connection with the merger;

 

   

the risk of potential stockholder litigation resulting from the announcement or completion of the merger;

 

   

certain directors and executive officers of Neenah have interests in the merger that may be different from, or in addition to, the interests of Neenah stockholders generally; and

 

   

various other risks associated with the merger of the type and nature described under the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” beginning on pages 38 and 35, respectively.

The Neenah board of directors considered all of the factors and concluded that the uncertainties, risks and potential negative factors relevant to the merger were outweighed by the potential benefits that it expected would be achieved as a result of the merger. This discussion of the information and factors considered by the Neenah board of directors includes the principal positive and negative factors considered by the Neenah board of directors, but is not intended to be an exhaustive recitation of all of the factors considered by the Neenah board of directors.

In view of the wide variety of factors considered in connection with its evaluation of the merger agreement and the merger, and the complexity of these matters, the Neenah board of directors did not find it useful to and did not attempt to quantify, rank or otherwise assign relative or specific weights to the various factors that it

 

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considered in reaching its determination to adopt and approve the merger agreement, the merger and the other transactions contemplated by the merger agreement. Rather, the Neenah board of directors viewed its determination and recommendation as being based on the totality of the information presented to it and the factors it considered.

In addition, individual members of the Neenah board of directors may have given differing weights to different factors. It should be noted that this explanation of the reasoning of the Neenah board of directors and certain information presented in this section is forward-looking in nature and, therefore, that information should be read in light of the factors discussed in the section entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 35.

In considering the recommendation of the Neenah board of directors, you should be aware that certain directors and executive officers of Neenah may have interests in the merger that are different from, or in addition to, interests of stockholders of Neenah generally, which may create potential conflicts of interest. The Neenah board of directors was aware of these interests and considered them when evaluating and negotiating the merger agreement, the merger and the other transactions contemplated by the merger agreement, and in recommending to Neenah’s stockholders that they vote in favor of the Neenah merger proposal, the Neenah compensation proposal and the Neenah adjournment proposal. See the section entitled “The Merger—Interests of Neenah Directors and Executive Officers in the Merger” beginning on page 111.

For the reasons set forth above, the Neenah board of directors unanimously recommends that the holders of Neenah common stock vote “FOR” the Neenah merger proposal, “FOR” the Neenah compensation proposal and “FOR” the Neenah adjournment proposal.

Opinion of Neenah’s Financial Advisor

The Neenah board of directors retained Perella Weinberg to act as its financial advisor in connection with the merger. The Neenah board of directors requested that Perella Weinberg undertake a study to consider the fairness, from a financial point of view, of the exchange ratio provided for pursuant to the merger agreement. On March 27, 2022, Perella Weinberg rendered to the Neenah board of directors its oral opinion, subsequently confirmed in writing, that, as of such date and based upon and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations set forth therein, the exchange ratio provided for pursuant to the merger agreement was fair, from a financial point of view, to the holders of shares of Neenah’s common stock (other than SWM and its affiliates).

The full text of Perella Weinberg’s written opinion, dated March 27, 2022, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken by Perella Weinberg, is attached as Annex C to this joint proxy statement/prospectus and is incorporated by reference herein. Perella Weinberg’s opinion was addressed to and provided for the information and assistance of the Neenah board of directors, in its capacity as such, in connection with, and for the purpose of, the Neenah board of directors’ evaluation of the exchange ratio from a financial point of view, and does not address any other term, aspect or implication of the merger agreement or the merger. Perella Weinberg’s opinion does not address the underlying decision by Neenah to engage in the merger nor the relative merits of the merger compared with any alternative transactions or business strategies. Perella Weinberg’s opinion was not intended to be and does not constitute a recommendation to any holder of shares of Neenah common stock as to how such holder should vote or otherwise act with respect to the merger or any other matter. Perella Weinberg’s opinion does not in any manner address what the value of shares of SWM common stock actually will be when issued or the prices at which shares of Neenah common stock or SWM common stock will trade at any time, including following announcement or completion of the merger. In addition, Perella Weinberg expressed no opinion as to the fairness of the merger to the holders of any other class of securities, creditors or other constituencies of Neenah. The description of Perella Weinberg’s opinion set forth below is qualified in its entirety by reference to the full text of the opinion.

 

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In arriving at its opinion, Perella Weinberg, among other things:

 

   

reviewed certain publicly available financial statements and other business and financial information with respect to Neenah and SWM, including equity research analyst reports;

 

   

reviewed certain internal financial statements, analyses and forecasts (which are referred to in this section as the “Neenah Forecasts”) and other internal financial information and operating data relating to the business of Neenah, in each case, prepared by management of Neenah and approved for Perella Weinberg’s use by management of Neenah;

 

   

reviewed certain internal financial statements, analyses and forecasts (which are referred to in this section as the “SWM Management Forecasts”) and other internal financial information and operating data relating to the business of SWM, in each case, prepared by management of SWM, as well as a sensitivities case developed by Neenah management (which is referred to in this section as the “SWM Sensitivities Case”) and approved for Perella Weinberg’s use by management of Neenah;

 

   

discussed the past and current business, operations, financial condition and prospects of Neenah and the combined company with senior management of Neenah, the Neenah board of directors and other representatives and advisors of Neenah;

 

   

discussed the past and current business, operations, financial condition and prospects of SWM and the combined company with senior executives of Neenah and SWM, the Neenah board of directors and other representatives and advisors of Neenah and SWM;

 

   

discussed with members of the senior management of Neenah and SWM their assessments of the strategic rationale for, and the potential benefits of, the merger;

 

   

reviewed certain estimates as to the amount and timing of certain cost savings and related expenses, operating efficiencies and financial synergies anticipated by management of Neenah to result from the consummation of the merger (which are referred to in this section as the “Synergies”) as approved for Perella Weinberg’s use by the management of Neenah;

 

   

compared the financial performance of Neenah and SWM with that of certain publicly-traded companies which Perella Weinberg believed to be generally relevant;

 

   

reviewed the historical trading prices and trading activity for the shares of Neenah common stock and the shares of SWM common stock and compared such price and trading activity with that of securities of certain publicly-traded companies which Perella Weinberg believed to be generally relevant;

 

   

participated in discussions among representatives of Neenah and SWM and their respective advisors;

 

   

reviewed the draft of the merger agreement dated March 27, 2022; and

 

   

conducted such other financial studies, analyses and investigations, and considered such other factors, as Perella Weinberg deemed appropriate.

For purposes of its opinion, Perella Weinberg assumed and relied upon, without assuming any responsibility for independent verification, the accuracy and completeness of all of the financial, accounting, legal, tax, regulatory and other information provided to, discussed with or reviewed by Perella Weinberg (including information that was available from public sources) and further relied upon the assurances of management of Neenah that they are not aware of any facts or circumstances that would make such information inaccurate or misleading in any material respect. With respect to the Neenah Forecasts, Perella Weinberg was advised by management of Neenah and assumed, with Neenah’s consent, that they were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of management of Neenah as to the future financial performance of Neenah and the other matters covered thereby and Perella Weinberg expressed no view as to the reasonableness of the assumptions on which they were based. With respect to the SWM Management Forecasts, Perella Weinberg was advised by management of SWM and assumed, with Neenah’s consent, that they were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of management of

 

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SWM as to the future financial performance of SWM and the other matters covered thereby and Perella Weinberg expressed no view as to the reasonableness of the assumptions on which they were based. With respect to the SWM Sensitivities Case, Perella Weinberg was advised by management of Neenah and assumed, with Neenah’s consent, that they were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of management of Neenah as to the future financial performance of SWM and the other matters covered thereby and Perella Weinberg expressed no view as to the reasonableness of the assumptions on which they were based. With respect to the Synergies, Perella Weinberg was advised by management of Neenah and assumed, with Neenah’s consent, that they were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of management of Neenah as to the matters covered thereby and Perella Weinberg expressed no view as to the reasonableness of the assumptions on which they were based. In arriving at its opinion, Perella Weinberg did not make and was not provided with any independent valuation or appraisal of the assets or liabilities (including any contingent, derivative or off-balance-sheet assets or liabilities) of Neenah, SWM or any of their respective subsidiaries. Perella Weinberg did not assume any obligation to conduct, nor did Perella Weinberg conduct, any physical inspection of the properties or facilities of Neenah, SWM or any other party. In addition, Perella Weinberg did not evaluate the solvency of any party to the merger agreement, or the impact of the merger thereon, including under any applicable laws relating to bankruptcy, insolvency or similar matters.

Perella Weinberg assumed that the final merger agreement would not differ from the draft of the merger agreement reviewed by it in any respect material to its analysis or opinion. Perella Weinberg also assumed that (i) the representations and warranties of all parties to the merger agreement and all other related documents and instruments that were referred to therein were true and correct in all respects material to its analysis and opinion, (ii) each party to the merger agreement and such other related documents and instruments would fully and timely perform all of the covenants and agreements required to be performed by such party in all respects material to its analysis and opinion, and (iii) the merger would be consummated in a timely manner in accordance with the terms set forth in the merger agreement, without any modification, amendment, waiver or delay that would be material to its analysis or opinion. In addition, Perella Weinberg assumed that in connection with the receipt of all approvals and consents required in connection with the merger, no delays, limitations, conditions or restrictions would be imposed that would be material to its analysis.

Perella Weinberg’s opinion addresses only the fairness from a financial point of view, as of March 27, 2022, to the holders of shares of Neenah common stock (other than SWM and its affiliates) of the exchange ratio pursuant to the merger agreement. Perella Weinberg was not asked to, nor did it, offer any opinion as to any other term of the merger agreement or any other document contemplated by or entered into in connection with the merger agreement, the form or structure of the merger or the likely timeframe in which the merger will be consummated. In addition, Perella Weinberg expressed no opinion as to the fairness of the amount or nature of any compensation to be received by any officers, directors or employees of any party to the merger agreement, or any class of such persons, whether relative to the exchange ratio or otherwise. Perella Weinberg expressed no opinion as to the fairness of the merger to the holders of any other class of securities, creditors or other constituencies of Neenah, as to the underlying decision by Neenah to engage in the merger or as to the relative merits of the merger compared with any alternative transactions or business strategies. Nor did Perella Weinberg express any opinion as to any tax or other consequences that might result from the transactions contemplated by the merger agreement or any other related document although it assumed with Neenah’s consent for purposes of its analysis that the merger would receive the tax treatment contemplated by the merger agreement. Perella Weinberg’s opinion did not address any legal, tax, regulatory or accounting matters, as to which Perella Weinberg understood Neenah received such advice as it deemed necessary from qualified professionals. Perella Weinberg was not requested to, and it did not, solicit third party indications of interest in the possible acquisition of all or part of Neenah.

Perella Weinberg’s opinion was necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to Perella Weinberg as of, the date of its opinion. It should be understood that subsequent developments may affect Perella Weinberg’s opinion and the assumptions used in

 

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preparing it, and Perella Weinberg does not have any obligation to update, revise, or reaffirm its opinion. The issuance of Perella Weinberg’s opinion was approved by a fairness committee of Perella Weinberg.

Summary of Material Financial Analyses

The following is a summary of the material financial analyses performed by Perella Weinberg and reviewed by the Neenah board of directors in connection with Perella Weinberg’s opinion and does not purport to be a complete description of the financial analyses performed by Perella Weinberg. The order of analyses described below does not represent the relative importance or weight given to those analyses by Perella Weinberg. Some of the summaries of the financial analyses include information presented in tabular format. In order to fully understand Perella Weinberg’s financial analyses, these tables must be read together with the text of each summary. These tables alone do not constitute a complete description of the financial analyses. Considering the data below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Perella Weinberg’s financial analyses. Future results may differ from those described and such differences may be material.

Selected Publicly-Traded Companies Analysis

Perella Weinberg performed a selected publicly-traded companies analysis, which is a method of deriving an implied value range for a company’s equity securities based on a review of publicly-traded companies selected by Perella Weinberg as being generally deemed relevant for comparative purposes. Perella Weinberg reviewed and compared certain financial information for Neenah and SWM to corresponding financial information, financial market multiples and ratios of the following publicly-traded companies:

 

   

3M Company

 

   

Avient Corporation

 

   

Berry Global Group, Inc.

 

   

Clearwater Paper Corporation

 

   

Donaldson Company, Inc.

 

   

Glatfelter Corporation

 

   

Rayonier Advanced Materials Inc.

 

   

Sylvamo Corporation

Although none of the above companies is identical to Neenah or SWM, Perella Weinberg selected these companies because they had publicly traded equity securities and were deemed by Perella Weinberg to be similar to Neenah and SWM in one or more respects, including operating in the advanced materials and specialty paper industries. In selecting these companies, Perella Weinberg considered various factors, including the similarity of the lines of business to Neenah’s and SWM’s lines of business, as well as the business models, technology, service offerings and end-market exposure of such companies.

For each of Neenah, SWM and the selected publicly-traded companies, Perella Weinberg reviewed the ratio of such company’s enterprise value (referred to as “EV”) to its estimated 2022 earnings before interest, taxes, depreciation, and amortization (referred to as “EBITDA”) as of March 25, 2022. For each of the selected companies, Perella Weinberg calculated and compared financial information and financial market multiples and ratios based on company filings for historical information and consensus third party research estimates for forecasted information.

 

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Set forth below are the high, low, mean and median multiples resulting from this analysis:

 

     EV /2022E
EBITDA
 

High

     12.0x  

Low

     3.8x  

Mean

     8.1x  

Median

     8.2x  

Based on the analysis of the relevant metrics described above and on professional judgments made by Perella Weinberg, Perella Weinberg selected and applied a range of multiples of 7.5x to 9.5x to 2022E EBITDA of Neenah using the Neenah Forecasts and to 2022E EBITDA of SWM using the SWM Management Forecasts and the SWM Sensitivities Case. From these analyses, Perella Weinberg derived ranges of implied equity values for each of Neenah and SWM. Perella Weinberg calculated implied values per share by dividing the implied equity values by the applicable fully diluted shares (based upon the number of issued and outstanding shares and other equity interests in each case provided by the managements of SWM and Neenah, as applicable, and using the treasury method for calculation of option dilution). The ranges of implied values per share derived from these calculations are summarized in the following table:

 

     Neenah Share
Price (based on
Neenah Forecasts)
     SWM Share Price
(based on SWM
Management
Forecasts)
     SWM Share Price
(based on SWM
Sensitivities Case)
 
     Low      High      Low      High      Low      High  

Implied Value Range Per Share (using 2022E EBITDA)

   $ 35.72      $ 52.06      $ 23.57      $ 39.80      $ 20.94      $ 36.47  

Perella Weinberg then calculated the exchange ratio ranges implied by the selected publicly-traded companies analysis. For each of the foregoing analyses, Perella Weinberg calculated (i) the ratio of the highest implied value per share for SWM derived from the selected publicly-traded companies analysis to the lowest implied value per share for Neenah derived from the selected publicly-traded companies analysis and (ii) the ratio of the lowest implied value per share for SWM derived from the selected publicly-traded companies analysis to the highest implied value per share for Neenah derived from the selected publicly-traded companies analysis to calculate the following implied exchange ratio ranges:

 

     Metric    Implied Exchange
Ratio Range

Neenah Forecasts / SWM Management Forecasts

   2022E EBITDA    0.898x—2.208x

Neenah Forecasts / SWM Sensitivities Case

   2022E EBITDA    0.980x—2.486x

These exchange ratio ranges can be compared to the exchange ratio of 1.358 SWM shares to be received for each Neenah share as provided for in the merger agreement.

Although the selected publicly-traded companies were used for comparison purposes, no business of any selected company was either identical or directly comparable to Neenah’s or SWM’s business. Perella Weinberg’s comparison of selected publicly-traded companies to Neenah and SWM and analysis of the results of such comparisons were not purely mathematical, but instead necessarily involved complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the relative values of the selected publicly-traded companies in such transactions and of the merger and was based on Perella Weinberg’s experience working with corporations on various merger and acquisition transactions.

 

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Discounted Cash Flow Analysis

For each of Neenah and SWM, Perella Weinberg performed a discounted cash flow analysis, which is a method of deriving an implied value range for a company’s equity securities based on the sum of the company’s unlevered free cash flows over a forecast period and the terminal value at the end of the forecast period. In connection with this analysis, Perella Weinberg used the Neenah Forecasts for Neenah, and the SWM Management Forecasts and the SWM Sensitivities Case for SWM. In performing this analysis, Perella Weinberg:

 

   

calculated the present value as of June 30, 2022, of the estimated standalone unlevered free cash flows (calculated as net operating profit after tax, plus depreciation and amortization, minus capital expenditures, and adjusting for changes in net working capital) that each of Neenah and SWM was forecasted to generate for 2022E through 2026E using discount rates ranging from 6.50% to 7.50% for Neenah and 6.00% to 7.00% for SWM, in each case based on estimates of the weighted average cost of capital of each company; and

 

   

added a range of terminal values for each of Neenah and SWM by applying a range of EV multiples of 7.5x to 9.5x to next twelve (12) months EBITDA of Neenah and SWM as of 2026E and discounted using discount rates ranging from 6.50% to 7.50% for Neenah and 6.00% to 7.00% for SWM, in each case based on estimates of the weighted average cost of capital of each company.

From the ranges of implied enterprise values generated by the foregoing analysis, Perella Weinberg derived ranges of implied equity values for each of Neenah and SWM. Perella Weinberg calculated implied values per share by dividing the implied equity values by the applicable fully diluted shares (based upon the number of issued and outstanding shares and other equity interests in each case provided by the managements of SWM and Neenah, as applicable, and using the treasury method for calculation of option dilution). The ranges of implied values per share derived from these calculations are summarized in the following table:

 

     Neenah Share
Price (based on
Neenah Forecasts)
     SWM Share Price
(based on SWM
Management
Forecasts)
     SWM Share Price
(based on SWM
Sensitivities Case)
 
     Low      High      Low      High      Low      High  

Implied Value Range Per Share

   $ 56.59      $ 77.35      $ 41.89      $ 60.60      $ 35.04      $ 51.82  

Perella Weinberg then calculated the exchange ratio ranges implied by the discounted cash flow analysis. For each of the foregoing analyses, Perella Weinberg calculated (i) the ratio of the highest implied value per share for SWM derived from the discounted cash flow analysis to the lowest implied value per share for Neenah derived from the discounted cash flow analysis and (ii) the ratio of the lowest implied value per share for SWM derived from the discounted cash flow analysis to the highest implied value per share for Neenah derived from the discounted cash flow to calculate the following implied exchange ratio ranges:

 

     Implied Exchange
Ratio Range
 

Neenah Forecasts / SWM Management Forecasts

     0.934x—1.846x  

Neenah Forecasts / SWM Sensitivities Case

     1.092x—2.207x  

These exchange ratio ranges can be compared to the exchange ratio of 1.358 SWM shares to be received for each Neenah share as provided for in the merger agreement.

Additional Financial Analyses

Historical Share Price Analysis

For the information of the Neenah board of directors and for reference purposes only, Perella Weinberg reviewed the share price performance of Neenah and SWM during various periods, including (i) the 12-month period

 

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ending on March 25, 2022, and (ii) the 6-month period ending on March 25, 2022. Perella Weinberg noted that the ranges of low and high trading prices of Neenah common stock and SWM common stock during each respective period were as follows:

 

     Neenah Common
Stock Share Price
     SWM Common
Stock Share Price
 

Trading Period

   Low      High      Low      High  

Last 12 Months

   $ 32.66      $ 56.93      $ 28.50      $ 49.74  

Last 6 Months

   $ 32.66      $ 55.93      $ 28.50      $ 37.94  

Based on the minimum and maximum share prices of Neenah and SWM, in each case, during the 12-month period ending on March 25, 2022 and the 6-month period ending on March 25, 2022, Perella Weinberg derived ranges of implied exchange ratios of shares of Neenah common stock to shares of SWM common stock of 0.657x to 1.998x and 0.861x to 1.962x, respectively. Perella Weinberg then calculated the exchange ratio ranges implied by the historical share price analysis. These exchange ratio ranges can be compared to the exchange ratio of 1.358 shares of SWM common stock to be received for each share of Neenah common stock as provided for in the merger agreement.

Research Analyst Price Targets

For the information of the Neenah board of directors and for reference purposes only, Perella Weinberg observed the most recent publicly available price targets for Neenah common stock published by Wall Street research analysts. Perella Weinberg observed that two such analyst estimates were available for Neenah (one published on March 7, 2022 and the other on March 8, 2022) and only one such analyst estimate was available for SWM (published on February 24, 2022). The selected price targets reflect each research analyst’s estimate of the future public market trading prices of shares of Neenah common stock and SWM common stock. Perella Weinberg noted that the analysts’ price targets for Neenah ranged from $64.00 to $65.00 per share, and that the analyst price target for SWM was $60.00 per share.

Based on comparisons of the high and low research analyst price targets for Neenah and the research analyst price target for SWM shares, Perella Weinberg derived a range of implied exchange ratios of shares of Neenah common stock to shares of SWM common stock of 1.067x to 1.083x. Perella Weinberg then calculated the exchange ratio ranges implied by the research analyst price target analysis. These exchange ratio ranges can be compared to the exchange ratio of 1.358 shares of SWM common stock to be received for each share of Neenah common stock as provided for in the merger agreement.

Miscellaneous

The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth herein, without considering the analyses or the summary as a whole could create an incomplete view of the processes underlying Perella Weinberg’s opinion. In arriving at its fairness determination, Perella Weinberg considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered. Rather, Perella Weinberg made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the analyses described herein as a comparison is directly comparable to Neenah, SWM or the merger.

Perella Weinberg prepared the analyses described herein for purposes of providing its opinion to the Neenah board of directors as to the fairness, from a financial point of view, as of the date of such opinion, of the exchange ratio of 1.358 SWM shares to be received for each share of Neenah common stock as provided for in the merger agreement to Neenah stockholders (other than SWM and its affiliates). These analyses do not purport to be appraisals or necessarily reflect the prices at which businesses or securities actually may be sold. Perella

 

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Weinberg’s analyses were based in part upon third party research analyst estimates, which are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by Perella Weinberg’s analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties to the merger agreement or their respective advisors, none of Neenah, SWM, Perella Weinberg or any other person assumes responsibility if future results are materially different from those forecasted by third parties.

As described above, the opinion of Perella Weinberg to the Neenah board of directors was one of many factors taken into consideration by the Neenah board of directors in making its determination to approve the merger. The type and amount of consideration payable in the merger, including the exchange ratio, was determined through negotiations between Neenah and SWM, rather than by any financial advisor, and was approved by the Neenah board of directors. The decision to enter into the merger agreement was solely that of the Neenah board of directors.

Perella Weinberg acted as financial advisor to the Neenah board of directors in connection with, and participated in certain negotiations leading to, the merger. For its services in connection with the merger, Perella Weinberg will receive an aggregate fee of $16,500,000, a portion of which was payable in connection with the delivery of Perella Weinberg’s opinion and $13,500,000 of which is contingent upon consummation of the merger. Neenah agreed to reimburse Perella Weinberg for its reasonable out-of-pocket expenses, to pay to Perella Weinberg a portion of any break-up fee received in connection with a termination of the merger, and to indemnify Perella Weinberg and related persons for certain liabilities and other items that may arise out of its engagement by Neenah and the rendering of its opinion.

Perella Weinberg has provided investment banking services for compensation to Neenah or its affiliates on various matters unrelated to the merger over past years, including acting as financial advisor to Neenah in connection with the acquisition by Neenah of Global Release Liners, S.L. During the two-year period ending March 27, 2022, Perella Weinberg received compensation aggregating less than $5,000,000, for services rendered in respect of such unrelated matters. During the two-year period prior to March 27, 2022, no material investment banking relationship existed between Perella Weinberg or its affiliates, on the one hand, and SWM or any of its affiliates, on the other hand, pursuant to which Perella Weinberg or its affiliates received or anticipates receiving compensation. However, Perella Weinberg and its affiliates in the future may provide investment banking and other financial services to SWM and/or Neenah and their respective affiliates and in the future may receive compensation for the rendering of these services. In the ordinary course of its business activities, Perella Weinberg and its affiliates may at any time hold long or short positions, and may trade or otherwise effect transactions, for its own account or the accounts of customers or clients, in (i) debt, equity or other securities (or related derivative securities) or financial instruments (including bank loans or other obligations) of Neenah, SWM or any of their respective affiliates and (ii) any currency or commodity that may be material to the parties or otherwise involved in the merger.

Certain Unaudited Prospective Financial Information

SWM and Neenah do not, as a matter of course, publicly disclose forecasts or internal projections as to their respective future performance, earnings or other results due to, among other reasons, the inherent uncertainty of the underlying assumptions and estimates, other than, from time to time, estimated ranges of certain expected financial results and operational metrics for the current year and certain future years in their respective regular earnings press releases and other investor materials.

However, in connection with the merger, SWM senior management and Neenah senior management prepared or approved for use certain unaudited prospective financial information which was provided to and considered by J.P. Morgan, at the direction of SWM management, and Perella Weinberg, at the direction of Neenah management, in each case for the purpose of performing financial analyses in connection with their respective fairness opinions, as described in this joint proxy statement/prospectus under “—Opinion of SWM’s Financial

 

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Advisor” beginning on page 83 and “—Opinion of Neenah’s Financial Advisor” beginning on page 96, and was provided to each of SWM and Neenah, respectively, and their respective boards of directors. We refer to this information collectively as the “prospective financial information.” A summary of certain significant elements of this information is set forth below and is included in this joint proxy statement/prospectus solely for the purpose of providing SWM stockholders and Neenah stockholders access to certain nonpublic information made available to SWM and Neenah and their respective financial advisors for the purpose of performing financial analyses in connection with their respective fairness opinions.

Although, in the view of the SWM senior management team and the Neenah senior management team, the prospective financial information was prepared on a reasonable basis, neither SWM nor Neenah endorses prospective financial information as a reliable indication of future results. Furthermore, although presented with numeric specificity, the prospective financial information reflects numerous estimates and assumptions made by SWM senior management or Neenah senior management, as applicable, at the time such prospective financial information was prepared or approved for use and represents SWM senior management’s or Neenah senior management’s respective evaluation of expected future financial performance on a stand-alone basis, without reference to the merger. In addition, since the prospective financial information covers multiple years, such information by its nature becomes subject to greater uncertainty with each successive year. These and the other estimates and assumptions underlying the prospective financial information involve judgments with respect to, among other things, economic, competitive, regulatory and financial market conditions and future business decisions that may not be realized and that are inherently subject to significant business, economic, competitive and regulatory uncertainties and contingencies, including, among other things, the inherent uncertainty of the business and economic conditions affecting the industry in which SWM and Neenah operate and the risks and uncertainties described under “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in this joint proxy statement/prospectus and in the reports that SWM and Neenah file with the SEC from time to time, all of which are difficult to predict and many of which are outside the control of SWM and Neenah and will be beyond the control of the combined company. There can be no assurance that the underlying assumptions would prove to be accurate or that the projected results would be realized, and actual results could differ materially from those reflected in the prospective financial information, whether or not the merger is completed. Further, these assumptions do not include all potential actions that the senior management of SWM or Neenah could or might have taken during these time periods. The inclusion in this joint proxy statement/prospectus of the unaudited prospective financial information below should not be regarded as an indication that SWM, Neenah or their respective boards of directors or financial advisors considered, or now consider, this prospective financial information to be material information to any SWM stockholders or Neenah stockholders, as the case may be, particularly in light of the inherent risks and uncertainties associated with such prospective financial information, or that it should be construed as financial guidance, and it should not be relied on as such. This information was prepared solely for internal use and is subjective in many respects and thus is susceptible to multiple interpretations and periodic revisions based on actual experience and business developments. The prospective financial information is not fact and should not be relied upon as being necessarily indicative of actual future results. The prospective financial information also reflects numerous variables, expectations and assumptions available at the time it was prepared as to certain business decisions that are subject to change and does not take into account any circumstances or events occurring after the date they were prepared, including the transactions contemplated by the merger agreement or the possible financial and other effects on SWM or Neenah of the merger, and does not attempt to predict or suggest future results of the combined company or give effect to the merger, including the effect of negotiating or executing the merger agreement, the costs that may be incurred in connection with consummating the merger, the potential synergies that may be achieved by the combined company as a result of the merger (except as expressly set forth below under “—Certain Synergies Attributable to the Merger”), the effect on SWM or Neenah of any business or strategic decision or action that has been or will be taken as a result of the merger agreement having been executed, or the effect of any business or strategic decisions or actions which would likely have been taken if the merger agreement had not been executed, but which were instead altered, accelerated, postponed or not taken in anticipation of the merger. Further, the projections do not take into account the effect of any possible failure of the merger to occur. No assurances can be given that if the prospective financial information and the underlying assumptions had been

 

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prepared as of the date of this joint proxy statement/prospectus, similar assumptions would be used. In addition, the prospective financial information may not reflect the manner in which the combined company would operate after the merger.

The prospective financial information was not prepared for the purpose of, or with a view toward, public disclosure or with a view toward complying with the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information, published guidelines of the SEC regarding forward-looking statements or generally accepted accounting principles. Neither Deloitte & Touche LLP (SWM’s and Neenah’s independent registered public accounting firm), nor any other independent registered public accounting firm, have audited, reviewed, examined, compiled nor applied any procedures with respect to the prospective financial information and, accordingly, such parties have not expressed any opinion or given any other form of assurance with respect thereto or its achievability and they assume no responsibility for the prospective financial information and disclaim any association with the prospective financial information. The reports of the independent registered public accounting firms incorporated by reference in this joint proxy statement/prospectus relate to the historical financial information of SWM and Neenah, respectively. Such reports do not extend to the prospective financial information and should not be read to do so. No independent registered public accounting firm has examined, compiled or otherwise performed any procedures with respect to the prospective financial information and, accordingly, no independent registered public accounting firm has expressed any opinion or given any other form of assurance with respect thereto and no independent registered public accounting firm assumes any responsibility for the prospective financial information.

SWM prospective financial information

The following prospective financial information used by J.P. Morgan and Perella Weinberg, in performing their analysis with respect to SWM on a stand-alone basis, was (a) provided by SWM management to J.P. Morgan and approved by SWM for use by J.P. Morgan, and (b) provided by SWM to Neenah, and provided by Neenah management to Perella Weinberg and approved by Neenah for use by Perella Weinberg. We refer in this joint proxy statement/prospectus to such unaudited prospective financial information as presented in the following table as the “SWM prospective financial information” or the “SWM Management Forecasts”.

 

(in millions)    Q3-Q4
2022E
     2023E      2024E  

Revenue

   $ 837.0      $ 1,749      $ 1,848  

EBITDA(1)

   $ 138.0      $ 275.0      $ 295.0  

EBIT(2)

   $ 96.0      $ 194.0      $ 212.0  

Unlevered Free Cash Flow(3)

   $ 95.0      $ 169.0      $ 177.0  

 

(1)

EBITDA means earnings before interest, taxes, depreciation and amortization.

(2)

EBIT means earnings before interest and taxes.

(3)

Unlevered Free Cash Flow means EBITDA minus cash taxes, capital expenditures and changes in working capital.

SWM Sensitivities Case

In addition to the SWM prospective information referenced above, Neenah management also prepared the SWM Sensitivities Case, consisting of Neenah management’s adjustments to the SWM Management Forecasts reflecting more conservative assumptions to category-level projections of growth rates and margins used in the SWM Management Forecasts and in order to stress test and consider the sensitivity of the enterprise SWM Management Forecasts to less favorable conditions. The SWM Sensitivities Case was provided by Neenah management to Perella Weinberg and approved by Neenah for use by Perella Weinberg. The adjustments and assumptions used in the SWM Sensitivities Case were informed by the ranges of historical SWM performance, market research, third party equity analyst reports and the judgment of Neenah management for the purposes of

 

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stress testing the SWM Management Forecasts. The SWM Sensitivities Case was prepared for illustrative purposes and not as a projection or forecast of future results. The SWM Sensitivities Case included the following unaudited prospective financial information:

 

(in millions)    2022E      2023E      2024E  

Revenue

   $ 1,627.0      $ 1,692.0      $ 1,763.0  

EBITDA(1)

   $ 249.0      $ 259.0      $ 274.0  

 

(1)

EBITDA means earnings before interest, taxes, depreciation and amortization.

Neenah prospective financial information

The following prospective financial information used by Perella Weinberg and J.P. Morgan, in performing their analysis with respect to Neenah on a stand-alone basis, was (i) provided by Neenah management to Perella Weinberg and approved by Neenah for use by Perella Weinberg, and (ii) provided by Neenah to SWM, and provided by SWM management to J.P. Morgan and approved by SWM for use by J.P. Morgan. We refer in this joint proxy statement/prospectus to such unaudited prospective financial information as presented in the following table as the “Neenah prospective financial information”.

 

(in millions)    2022E      2023E      2024E  

Revenue

   $ 549.0      $ 1,121      $ 1,155  

EBITDA(1)

   $ 72.0      $ 165.0      $ 180.0  

EBIT(2)

   $ 49.0      $ 117.0      $ 130.0  

Unlevered Free Cash Flow(3)

   $ 26.0      $ 81.0      $ 98.0  

 

(1)

EBITDA means earnings before interest, taxes, depreciation and amortization.

(2)

EBIT means earnings before interest and taxes.

(3)

Unlevered Free Cash Flow means EBITDA minus cash taxes, capital expenditures and changes in working capital.

Certain Synergies Attributable to the Merger

SWM management and Neenah management jointly developed and provided to their respective boards of directors prospective financial information relating to the anticipated cost synergies to be realized by the combined company, and related costs of achieving such synergies, for the years 2022 through 2024 expected to result from the merger. Such prospective financial information, which we refer to in this “—Certain Synergies Attributable to the Merger” section as the “synergies,” was also (i) provided by SWM management to J.P. Morgan and approved for use by J.P. Morgan, and (ii) provided by Neenah management to Perella Weinberg and approved by Neenah for use by Perella Weinberg, in each case for the purpose of performing financial analyses in connection with such financial advisor’s fairness opinion as described in this joint proxy statement/prospectus under “—Opinion of SWM’s Financial Advisor” beginning on page 83 and “—Opinion of Neenah’s Financial Advisor” beginning on page 96.

The synergies consisted of estimated run-rate cost synergies increasing to reach at least $65 million in 24 to 36 months. The synergies assumed that the expected benefits of the merger would be realized, including that no restrictions, terms or other conditions would be imposed in connection with the receipt of any necessary governmental, regulatory or other approvals or consents in connection with the completion of the merger. In addition, the analysis for estimated cost synergies assumed $18.0 million in costs to achieve and a cash release synergy benefit of $25.0 million. The estimated cost synergies are expected to come primarily from cost savings in elimination of duplicative corporate structures, technology and infrastructure optimization and operational synergies.

 

 

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See the section above entitled “The Merger—Certain Unaudited Prospective Financial Information” beginning on page 103 for further information regarding the uncertainties underlying the synergies as well as the sections entitled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” beginning on pages 35 and 38, respectively, for further information regarding the uncertainties and factors associated with realizing the synergies in connection with the merger.

General

The prospective financial information was prepared separately using, in some cases, different assumptions, and the different estimates are not intended to be added together. Adding the prospective financial information together for the two companies is not intended to represent the results the combined company will achieve if the merger is completed and is not intended to represent forecasted financial information for the combined company if the merger is completed.

By including in this joint proxy statement/prospectus a summary of the prospective financial information, neither SWM nor Neenah nor any of their respective representatives has made or makes any representation to any person regarding the ultimate performance of SWM or Neenah compared to the information contained in the prospective financial information. Neither SWM, Neenah, nor, after completion of the merger, the combined company, undertakes any obligation to update or otherwise revise the prospective financial information to reflect circumstances existing since their preparation or to reflect the occurrence of subsequent or unanticipated events, even in the event that any or all of the underlying assumptions are shown to be in error, or to reflect changes in general economic or industry conditions. None of SWM, Neenah, J.P. Morgan, Perella Weinberg or their respective representatives has made, makes or is authorized in the future to make any representation to any stockholder of SWM or Neenah or other person regarding SWM’s or Neenah’s ultimate performance compared to the information contained in the prospective financial information or that the results reflected in the prospective financial information will be achieved. The prospective financial information included above is being provided because it was made available to and considered by J.P. Morgan, Perella Weinberg, SWM and Neenah and their respective boards of directors in connection with the merger.

In light of the foregoing, and considering that the SWM and Neenah special meetings will be held several months after the prospective financial information was prepared, as well as the uncertainties inherent in any forecasted information, SWM stockholders and Neenah stockholders are cautioned not to place unwarranted reliance on such information, and are urged to review SWM’s and Neenah’s most recent SEC filings for a description of their reported financial results and the financial statements of SWM and Neenah incorporated by reference in this joint proxy statement/prospectus. See the section entitled “Where You Can Find More Information” beginning on page 188. The prospective financial information summarized in this section is not being included in this joint proxy statement/prospectus in order to induce any holder of SWM common stock to vote in favor of the SWM share issuance proposal or any of the other proposals to be voted on at the SWM special meeting or to induce any holder of Neenah common stock to vote in favor of the Neenah merger proposal or any of the other proposals to be voted on at the Neenah special meeting.

Interests of SWM’s Directors and Executive Officers in the Merger

In considering the recommendation of the SWM board of directors to vote for the SWM share issuance proposal and the other proposals to be considered at the SWM special meeting, SWM stockholders should be aware that SWM’s directors and executive officers may have interests in the merger that are different from, or in addition to, the interests of SWM stockholders generally, which create potential conflicts of interest. The SWM board of directors was aware of these interests and considered them, among other matters, in evaluating and negotiating the merger agreement and approving the merger agreement, and in recommending to the SWM stockholders that they vote for the SWM share issuance proposal and the other proposals to be considered at the SWM special meeting. For more information, see the sections entitled “The Merger—Background of the Merger” beginning on page 61 and “The Merger—SWM’s Reasons for the Merger; Recommendation of SWM’s Board of Directors” beginning on page 80. Any such interests are described in more detail below.

 

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Change of Control Agreements

On November 2, 2016, the compensation committee of the SWM board of directors adopted and approved the Schweitzer-Mauduit International, Inc. 2016 Executive Severance Plan (which we refer to as the “2016 Plan”) for members of SWM’s senior executive team.

The 2016 Plan provides that in the event of termination of a participant’s employment with SWM or one of its participating subsidiaries or business units within two (2) years after a change of control of SWM for any reason other than cause, retirement, disability or death, a participant will be entitled to salary and benefit continuation. The merger and the transactions contemplated by the merger agreement will constitute a change of control under the 2016 Plan.

In the event of a qualifying termination of employment in connection with a change of control, the then-serving named executive officers would generally be entitled to receive: (i) a cash payment in an amount equal to three times the highest annual compensation (base salary and annual incentive awards) paid or payable within the three-year period ending on the date of termination and (ii) welfare benefits (including, health and dental benefits) from SWM for a period of three (3) years.

The payments to a participant employed by one of SWM’s non-U.S. subsidiaries or business units are subject to certain adjustments to take into account the differences between the respective compensation, benefit and pension plans and programs in the United States and the participant’s place of employment.

The 2016 Plan provides that any benefits triggered by a change of control are subject to an automatic reduction to avoid the imposition of excise taxes under Section 4999 of the Code in the event such reduction would result in a better after-tax result for the executive. The merger and the transactions contemplated by the merger agreement will not trigger excise taxes under Section 4999 of the Code.

Upon a change of control, all deferred compensation plan contributions that have been granted to a participant, but not yet vested as of the effective date, vest automatically. Awards granted under SWM’s 2015 Long-Term Incentive Plan are subject to double trigger vesting upon a change of control — meaning that both a qualifying termination of employment and a change of control must occur prior to the accelerated vesting of such awards. Under SWM’s annual incentive program, in the event a participant is terminated without cause within two (2) years following a change of control, the participant is entitled to payment of a pro rata portion of the incentive award at the target performance percentage, without regard to achievement of pre-established objectives.

SWM’s equity award agreements also include accelerated vesting provisions for a termination of employment (i) due to death, disability or retirement (age 55, with at least five (5) years of service to SWM and consent to retire provided by the compensation committee of the SWM board of directors); (ii) without cause or due to good reason within 24 months following a “change of control” of SWM; or (iii) without cause not within such 24-month period. If the performance period with respect to a performance award is in process, then the award will (a) vest on a pro rata basis based on target performance in the event of death, disability, or termination of employment without cause or due to good reason within 24 months following a change of control; (b) vest on a pro rata basis based on actual performance for in-process performance periods in the case of retirement; or (c) be forfeited for a termination of employment for any other reason. “Cause” is defined as the termination of the participant’s employment by SWM, on the basis of the willful and continued failure to substantially perform the duties assigned (other than a failure resulting from the participant’s disability), the willful engaging in conduct which is demonstrably injurious to SWM or its subsidiaries or affiliates (monetarily or otherwise), any act of dishonesty, the commission of a felony, the continued failure to meet performance standards, excessive absenteeism, or a significant violation of any statutory or common law duty of loyalty to SWM. “Good reason” includes the occurrence of one or more of the following without the participant’s express written consent, which circumstances are not remedied by SWM within 30 days after its receipt of a written notice from the participant describing the applicable circumstances (which notice must be provided by the participant within 90 days after

 

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the participant’s knowledge of the applicable circumstances): (w) a material diminution in the participant’s base compensation; (x) a material diminution in the participant’s authority, duties or responsibilities; (y) a material change in the geographic location at which the participant must perform services; or (z) any other action or inaction that constitutes a material breach by SWM of the agreement under which the participant provides services; provided, however, in the event of a termination due to good reason the participant must terminate employment within two (2) years following the initial occurrence of the circumstance constituting good reason.

The maximum amounts payable upon termination pursuant to the 2016 Plan, assuming that a change of control of SWM and/or a qualifying termination of employment occurs as of the effective time, are set forth in the following tables for all named executive officers other than Mr. Hoek. Mr. Hoek does not participate in the 2016 Plan and will be entitled to severance benefits as required by Luxembourg law. Upon a qualifying termination of Mr. Hoek’s employment with SWM or an affiliate within one year of a change of control or absent a change of control for a reason other than death, retirement, disability, voluntary resignation or cause, in each case, as of the effective time, Mr. Hoek would have been entitled to receive (i) $429,431, payable as a lump sum, representing one year’s base salary, and (ii) $2,600, payable on Mr. Hoek’s behalf, representing Company-paid life and disability insurance premiums for one year. In addition, upon a qualifying termination of Mr. Hoek’s employment with SWM or an affiliate within one year of a change of control or a termination of Mr. Hoek’s employment due to death or disability, in each case as of the applicable effective time, Mr. Hoek would be entitled to a cash payment of $185,590, representing Mr. Hoek’s incentive award under SWM’s annual incentive program, based on actual performance, payable at the same time payments under our annual incentive program are made to other executives. In the event of a termination of Mr. Hoek’s employment for any of the reasons described in this paragraph, Mr. Hoek would also be entitled to $41,291, payable as a lump sum, in respect of accrued but unused vacation.

SWM Director Deferred Compensation Plan

SWM directors in the U.S. may elect to defer all or part of their compensation under the Deferred Compensation Plan No. 2 for Non-Employee Directors (which we refer to as the “SWM Director Plan”), which is a non-qualified, deferred compensation plan established in 2005 to allow participants to defer receipt of compensation and payment of certain federal and state income taxes. Each participating director has an individual deferral account that is credited with cash or stock units, which include accumulated dividends, with stock units credited under the plan to be settled in shares of SWM common stock. Each director’s account balance under the SWM Director Plan will be distributed in accordance with the distribution election made by the director prior to the deferral to which it relates. Each director who previously elected to be paid a lump sum following a “Change of Control” (as defined in the SWM Director Plan) is required to be paid. The merger will result in a Change of Control as so defined. The aggregate value of the account balances in the SWM Director Plan held by SWM non-employee directors as of May 2, 2022 was $6,994,467, all of which will be paid within 60 days following a Change of Control.

Golden Parachute Compensation

Pursuant to Item 402(t) of Regulation S-K, the table below sets forth the amount of payments and benefits that each of SWM’s named executive officers would or may receive in connection with the merger. The amounts reported below are based on various assumptions that may or may not actually occur or be accurate on the relevant date. For example, we have assumed, among other things, that: ((i) the effective time is July 1, 2022, which is the assumed date of the closing solely for the purposes of disclosure in this section and (ii) the employment of each of SWM’s named executive officers is terminated without cause or due to the named executive officer’s resignation for good reason (each of which we refer to as a “qualifying termination”) in either case, immediately following the assumed effective time of July 1, 2022; (iii) that the number of equity awards held by each named executive officer on May 4, 2022, is the same as the number of equity awards that will be held by each such named executive officer at the effective time, such that the equity values in the table below do not take into account any vesting or forfeitures that may occur between such date and the effective time.

 

 

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The actual amounts payable to SWM’s named executive officers will depend on whether the named executive officer experiences a qualifying termination, the date of termination (if any) and the terms of the plans or agreements in effect at such time, and accordingly may differ materially from the amounts set forth below. The amounts payable to SWM’s named executive officers absent a qualifying termination are $0. Dr. Kramer will be terminated, after the closing of the transaction, as a result of the change of control.

All benefits payable to SWM’s named executive officers arise solely as a result of the closing and a qualifying termination and are considered “double trigger” benefits. The merger does not result in additional benefits to SWM’s named executive officers absent a qualifying termination.

 

     Cash ($)(1)      Equity ($)(2)      Perquisites/
Benefits ($)(3)
     Total ($)  

Jeffrey Kramer

     7,665,156        5,629,823        99,092        13,394,071  

R. Andrew Wamser, Jr.

     3,279,421        2,598,795        114,821        5,993,037  

Omar Hoek

     695,840        1,850,648        2,600        2,549,088  

Ricardo Nunez

     3,185,607        1,715,370        117,474        5,018,451  

Tracey Peacock

     2,045,277        839,838        82,527        2,967,642  

 

(1)

Cash. Pursuant to change of control agreements with the named executive officers, upon a “double trigger” termination without cause or by the executive for good reason, each of the named executive officers (expect Mr. Hoek) is entitled to three times the executive’s highest base salary for the prior three year period and three times the executive’s highest short term incentive bonus for the prior three year period, plus a prorated short term incentive bonus for the year of termination (expected to be approximately 6 months of the 12 month measurement period). Mr. Hoek’s benefits on a qualifying termination will be determined under Luxembourg law.

(2)

Equity. The following table sets forth the value of unvested SWM restricted stock awards (which we refer to as “RSAs”) and unvested performance share awards (which we refer to as “PSAs”) subject to double trigger acceleration under the change of control agreements. The tabular disclosure set forth above assumes a price of $28.60 per share of SWM common stock (the average per-share closing price of SWM over the first five (5) business days following the announcement of the merger on March 28, 2022, determined pursuant to Item 402(t) of Regulation S-K). All equity held by SWM’s named executive officers was granted in connection with its regular executive officer new hire or annual compensation practices, and SWM has not provided any special grants or bonuses to any of the named executive officers.

(3)

Perquisite and Benefits. Each named executive officer is entitled to continued health and welfare benefits for three (3) years following a qualifying termination. Such benefits are only provided if a qualifying termination occurs and are accordingly double trigger benefits.

 

Named Executive Officer    Company
RSAs (#)
     Value of
Company
RSAs ($)
     Company
PSAs (at
target) (#)
     Value of
Company
PSAs ($)
     Total Value of
Equity
Awards ($)
 

Jeffrey Kramer

     51,399        1,470,011        145,448        4,159,812        5,629,823  

R. Andrew Wamser, Jr.

     56,858        1,626,138        34,009        972,657        2,598,795  

Omar Hoek

     43,287        1,238,008        21,421        612,640        1,850,648  

Ricardo Nunez

     37,721        1,078,820        22,257        636,550        1,715,370  

Tracey Peacock

     12,598        360,302        16,767        479,536        839,838  

Management of the Combined Company

Following the completion of the merger, certain executive officers of SWM will continue employment with the combined company, including, Omar Hoek, the current Executive Vice President, Engineered Papers of SWM, who will continue as the Chief Operating Officer of the combined company, Sarma Malladi, the current Chief Information Officer of SWM, who will continue as the Chief Information Officer of the combined company, Ricardo Nunez, the current Executive Vice President and General Counsel of SWM, who will continue as the

 

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General Counsel, Secretary and Chief Compliance Officer of the combined company and Andrew Wamser, the current Executive Vice President and Chief Financial Officer of SWM, who will continue as the Chief Financial Officer of the combined company.

Mr. Hoek, Mr. Malladi, Mr. Nunez and Mr. Wamser will be compensated for their service with the combined company. The compensation and benefits programs applicable to the executive officers of the combined company may differ from those currently applicable to SWM’s executive officers; however, no merger-related adjustments to such compensation and benefits programs have been determined as of the date of this joint proxy statement/prospectus. For more information, see the section entitled “—Governance of the Combined Company” below.

Interests of Neenah’s Directors and Executive Officers in the Merger

In considering the recommendation of Neenah’s board of directors to vote for the Neenah merger proposal, Neenah stockholders should be aware that the directors and executive officers of Neenah may have interests in the merger that are different from, or in addition to, the interests of Neenah stockholders generally and that may create potential conflicts of interest. The Neenah board of directors was aware of these interests and considered them, among other matters, in evaluating and negotiating the merger agreement and approving the merger agreement, and in recommending to Neenah stockholders that they vote for the Neenah merger proposal. For more information, see the sections entitled “The Merger—Background of the Merger” beginning on page 61 and “The Merger—Neenah’s Reasons for the Merger; Recommendation of Neenah’s Board of Directors” beginning on page 92. These interests are described in more detail below, and certain of them are quantified in the narrative and in the section entitled “—Quantification of Payments to Neenah’s Named Executive Officers” beginning on page 114.

Treatment of Neenah Equity Awards

Except as described in the sections below entitled “—Neenah Executive Severance Plan” and “—Accelerated Vesting of Neenah’s Equity Awards in connection with Change of Control,” the Neenah equity awards held by Neenah’s executive officers immediately prior to the effective time will be generally treated in the same manner as those Neenah equity awards held by other employees of Neenah. For additional information regarding the acceleration of the Neenah equity awards held by the named executive officers and an estimate of the amounts that would be realized by each of Neenah’s named executive officers upon a termination without “Cause” or for “Good Reason” (each as defined in the applicable award agreement or the Neenah Executive Severance Plan) at the effective time in respect of their unvested and unearned Neenah equity awards, see the sections entitled “Quantification of Payments to Neenah’s Named Executive Officers” beginning on page 114.

For more information on the treatment of the Neenah equity awards, see the section entitled “The Merger Agreement—Treatment of Neenah Equity Awards” beginning on page 129.

Accelerated Vesting of Neenah’s Equity Awards in connection with Change of Control

Except as described below, the Neenah equity award agreements with Neenah’s executive officers require both the occurrence of a “Change of Control” and a termination of employment by the employer without “Cause” or a resignation by the officer for “Good Reason” within two (2) years after a Change of Control before acceleration of vesting in connection with a Change of Control (as such terms are defined in either the applicable award agreement or the Executive Severance Plan) is triggered (i.e., a “double trigger”). Upon the occurrence of a double trigger, the award agreements and the Executive Severance Plan provide for full vesting. With respect to Neenah’s performance share awards, any Neenah performance share award with a performance period that is incomplete (or that is complete but for which performance is not determinable due to the unavailability of the required data for relative measures) as of the effective time will be deemed earned at the target number of shares subject to such Neenah performance share award (as set forth in the applicable Neenah performance share

 

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award), but such award will remain subject to vesting, including double-trigger vesting as discussed above. For a full description of such vesting conditions, please see the section entitled “The Merger Agreement—Treatment of Neenah Equity Awards” beginning on page 129.

For an estimate of the value of the payments and benefits described above that would be payable to the Neenah named executive officers under the Executive Severance Plan in connection with the merger, see the section entitled “—Quantification of Payments to Neenah’s Named Executive Officers” beginning on page 114.

Neenah Executive Severance Plan

Each of the executive officers of Neenah is eligible for benefits under Neenah’s Executive Severance Plan (which we refer to as the “Executive Severance Plan”). Under the Executive Severance Plan, benefits are payable upon the occurrence of a qualifying termination of employment within two (2) years after a “Change of Control” (as defined in the Executive Severance Plan). The merger will result in a Change of Control as so defined. A qualifying termination of employment is the employer’s termination of the officer’s employment without “Cause” (as defined in the Executive Severance Plan) or the officer’s resignation for “Good Reason” (as defined in the Executive Severance Plan).

In the event payments are triggered for an officer under the Executive Severance Plan, subject to the officer’s execution of an agreement provided by Neenah containing a general release of claims, and any non-competition, non-solicitation and non-disclosure requirements of Neenah, the officer will receive:

 

   

a lump sum payment of severance pay as soon as practicable following termination, equal to the sum of the following:

 

   

two (2) times annual base salary as in effect prior to the termination of employment (without regard to any reduction that constitutes a Good Reason event),

 

   

an amount equal to two (2) times the target annual bonus for the year in which termination of employment occurs,

 

   

the amount of the annual bonus earned through the date of the Change of Control, or if higher, termination of employment,

 

   

an amount equal to the non-elective employer contributions under Neenah’s 401(k) Retirement Plan and Neenah’s Supplemental Retirement Contribution Plan that would have been made if the officer had remained employed two (2) more years and earned the two (2) times base salary component of severance pay described above over such period, plus an amount equal to the portion of the account balance attributable to any forfeited nonvested non-elective contributions under such plans (or any successor or additional plan),

 

   

an amount equal to the premiums the officer would have to pay for continuation of group medical and dental plan coverage under COBRA for twenty-four (24) months after termination of employment based on the premiums in effect at the date of termination of employment, and

 

   

a cash payment for accrued retiree medical credits equal to $1 times the number of accrued retiree medical credits;

 

   

full vesting under the Neenah Deferred Compensation Plan and under any awards issued under Neenah’s equity-based compensation plans; and

 

   

outplacement benefits of up to $50,000 (which are also payable if the qualifying termination occurs more than two (2) years after the Change of Control).

If any payments or benefits under the Executive Severance Plan are parachute payments within the meaning of Section 280G of the Internal Revenue Code which are subject to the 20% excise tax under Section 4999 of the

 

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Internal Revenue Code, the plan provides that the payments and benefits will be reduced to the maximum amount that can be paid without triggering the excise tax, but only if such reduction would result in the officer retaining a larger after-tax amount.

For purposes of the Executive Severance Plan, “Cause” includes certain actions or failures by the officer, such as (i) willful failure to perform duties; (ii) embezzlement, fraud, or misappropriation against Neenah or its affiliates; (iii) conviction or a plea of guilty or nolo contendre to a felony charge or discovery by Neenah of such an undisclosed conviction or plea that occurred within the last ten (10) years; (iv) illegal drug use or possession; (v) reporting to work while intoxicated; (vi) unlawful trading in securities based on information gained as a result of services for Neenah or an affiliate; (vi) violation of corporate policies; or (viii) willful disclosure of confidential information or trade secrets of Neenah or an affiliate.

For purposes of the Executive Severance Plan, “Good Reason” includes certain actions by the employer relating to the officer, such as (i) diminishment in duties, (ii) reduction in base salary by 5% or more (excluding certain across-the-board reductions for eligible employees in the plan), (iii) relocating the officer’s work place by more than 50 miles that also increases the officer’s commute by more than 50 miles, (iv) failure to pay compensation that is owed, (v) failure to continue in effect any compensation plan which is material to the officer’s compensation and such failure diminishes the officer’s compensation, or (vi) failure to provide benefits in the aggregate that are at least as favorable than provided at the time of the Change of Control.

For an estimate of the value of the payments and benefits described above that would be payable to the Neenah named executive officers under the Executive Severance Plan upon a qualifying termination in connection with the merger, see the section entitled “—Quantification of Payments to Neenah’s Named Executive Officers” beginning on page 114 and the table “Merger-Related Compensation for Neenah’s Executive Officers” beginning on page 114.

Neenah Directors’ Deferred Compensation Plan

Certain of Neenah’s non-employee directors have account balances under the Neenah Directors’ Deferred Compensation Plan (which we refer to as the “Neenah Director Plan”). Each Neenah director’s Neenah Director Plan account balance will be distributed in accordance with the distribution election made by the director prior to the deferral to which it relates. Each director who previously elected to be paid a lump sum within 90 days following a “Change of Control” (as defined in the Neenah Director Plan) is required to be paid within that time period. The merger will result in a Change of Control as so defined. The aggregate value of the account balances in the Neenah Director Plan held by Neenah non-employee directors as of April 28, 2022 was $74,434, all of which is to be paid within 90 days following a Change of Control.

Neenah Deferred Compensation Plan

Two (2) of Neenah’s current executive officers have account balances under the Neenah Deferred Compensation Plan (which we refer to as the “Neenah Deferred Compensation Plan”). Each Neenah executive officer’s account balance in the Neenah Deferred Compensation Plan will be distributed in accordance with the distribution election made by the officer prior to the deferral to which it relates. Each executive officer who previously elected to be paid a lump sum within 90 days following a “Change of Control” is required to be paid within that time period. The merger will result in a Change of Control as so defined. The aggregate value of the account balances in the Neenah Deferred Compensation Plan held by Neenah’s executive officers as of April 28, 2022 was $33,578, of which $11,307 was unvested.

Neenah Supplemental Retirement Contribution Plan

Three (3) of Neenah’s current executive officers have account balances under the Neenah Supplemental Retirement Contribution Plan (which we refer to as the “Neenah Supplemental Retirement Plan”). All of the

 

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account balances held by such officers under the Neenah Supplemental Retirement Plan are fully vested. Each participant is required to be paid a lump sum within 30 days following a “Change of Control” (as defined in the Neenah Supplemental Retirement Plan). The merger will result in a Change of Control as so defined. The aggregate value of the account balances in the Neenah Supplemental Retirement Plan held for the Neenah named executive officers as of April 28, 2022 was $581,073.

Quantification of Payments to Neenah’s Named Executive Officers

The following table sets forth the information required by Item 402(t) of Regulation S-K regarding the compensation of Neenah’s named executive officers based on the merger, assuming the following:

 

   

the effective time will occur on April 20, 2022 (which is the assumed date solely for purposes of this quantification disclosure);

 

   

each of Neenah’s named executive officers will experience a qualifying termination under the Neenah Executive Severance Plan immediately following the effective time;

 

   

the named executive officer’s base salary and annual target bonus remain unchanged from those in place as of April 20, 2022;

 

   

equity awards held by Neenah’s named executive officers at the effective time are those that were outstanding as of April 20, 2022;

 

   

a per share price of SWM common stock of $28.60 (the average closing price per share of SWM common stock over the first five (5) business days following the announcement of the merger on March 28, 2022); and