Specialty Chemicals Continue to See Strong Growth Potential Chemicals Industry Update

SPECIALTY CHEMICALS CONTINUE TO SEE STRONG GROWTH POTENTIAL CHEMICALS INDUSTRY UPDATE | MARCH 2021

March 2021

3 Chemicals Industry Update Specialty Chemicals Continue To See Strong Growth Potential

TABLE OF CONTENTS KEY INDUSTRY TAKEAWAYS

 Industry Outlook Capstone Headwaters’ Industrials Group is pleased to share its Chemicals Industry update. Through our ongoing conversations with active industry players  Segment Highlight and analysis of trends during COVID-19, we have identified several key takeaways  Oil & Gas Impact on Feedstocks below, followed by an in-depth overview of industry dynamics on the following  M&A Overview pages.  Notable Transactions 1. Pandemic-induced manufacturing slowdowns and demand shocks have  Select Transactions resulted in a 3.6% decrease in total chemical production value in 2020 year- over-year (YOY).  Public Company Data  Report Contributors 2. Chemicals have played a critical role throughout the pandemic providing inputs for disinfection and sanitation, protective equipment, and medical  Firm Track Record supplies and equipment.

3. Ethane is expected to remain the dominant feedstock in 2021 as oil prices continue to recover due to a shrinking supply of oil in storage.

4. While specialty chemicals saw depressed demand across nearly all end CONTACTS markets in Q2 and Q3 2020, Capstone expects end market recovery to fuel demand throughout 2021, driving merger and acquisition (M&A) activity. Doug Usifer Managing Director 5. Strategic buyers have accounted for 67.1% of 2021 year-to-date (YTD) 802-735-2330 transaction activity as industry participants continue to utilize M&A to form [email protected] synergies and bolster service offerings. 6. Add-on deals have composed 20.0% of total 2021 YTD volume as PE-backed David Bench companies have used tuck-in acquisitions to enhance their product portfolios Managing Director and expand geographically. 949-734-7888 [email protected] 7. M&A activity has exceeded prior year levels in 2021 YTD, providing optimism for a healthy deal environment throughout the remainder of the year. Tracy Patch Director 949-220-0540 [email protected] Sophea Chau Jesse Betzner Managing Director, Vice President, Consumer & Retail Consumer & Retail

2 Chemicals | March 2021

INDUSTRY OUTLOOK

In 2020, total chemical production volume, excluding pharmaceuticals, fell by 3.6% YOY due to pandemic- induced manufacturing slowdowns and demand shocks, Growing customer demand, stabilizing according a press release by the American Chemistry “ export markets, and a competitive edge Council (ACC).1 End market performance amid the linked to domestic supplies of shale gas pandemic has largely impacted downstream demand for and natural gas liquids (NGLs) are among chemical manufacturers. Chemicals have been crucial in the factors pointing to continued gains combatting COVID-19, providing inputs for disinfection in U.S. chemistry. and sanitation, protective equipment, and medical supplies and equipment. However, plastic resins were the Martha Moore, Senior Director of Policy Analysis and only segment to post growth in 2020, benefitting from its Economics” at the ACC, in the press release vital role as an input in COVID-19 related equipment and the rapidly developing Automotive market. The Plastic Resins market is estimated to experience a compound annual growth rate (CAGR) of 4% from 2020-2027, Annual U.S. Chemical Product Manufacturing according to Grand View Research.2 Revenues Forecasted to Improve Steadily Following a Substantial Decline in 2020 While specialty chemicals saw depressed demand across nearly all end markets in Q2 and Q3 2020, Capstone 20% expects end market recovery to fuel demand throughout 10% 7.4% 2021, driving M&A activity. The global specialty chemicals 4.0% 3.4% 3.7% 3.4% market size is expected to expand at a CAGR of 3.7% through 2027, according to Grand View Research.3 0% Notably, Capstone’s Chemicals index has indicated an EBITDA multiple increase of 103.5% on March 1st, 2021 -10% rd from its trough on March 23 , 2020 while the DJIA and % Change YOY S&P 500 Chemicals Industry indices recovered 67.7% and -20% 76.1%, respectively, reflecting the industry’s defensibility. -18.5% Ethane is expected to remain the dominant feedstock in -30% 2021 as oil prices continue to recover due to a shrinking 2020 2021 2022 2023 2024 2025 supply of oil in storage. Source: IHS Markit, Capital IQ, PitchBook, FactSet, and Capstone Research

Chemicals Index Annual Return Reaches 33.3% in March Chemicals Index DJIA S&P 500 - Chemicals Industry 70% 50% 36.4% 30% 33.3% 18.1% 10% -10% -30% Total Return -50% -70% Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21

Index includes: AKZA, AKE, 3407, BAS, BAYN, DOW, DD, EMN, XOM, 1301, A051910, LYB, PPG, 2010, 338 Source: FactSet (as of March 2, 2021) 3 Chemicals | March 2021

SEGMENT HIGHLIGHT

Specialty chemicals have important applications in the $91.4 million) and Tate & Lyle acquired Sweet Green Food and Beverage industry, functioning as inputs for Fields (December 2020, Undisclosed). PureCircle and ingredients and preservatives. In recent years, consumers Sweet Green Fields are both leading producers of stevia, a have shifted diets towards health-conscious and plant- zero-calorie sugar supplement. Capstone believes that based foods, while also placing emphasis on sustainable chemicals companies providing inputs for the Food and production practices. This has heightened demand for Beverage industry will continue to utilize strategic M&A in chemical companies that specialize in the production of order to capture the heightened demand for natural and healthy and sustainable inputs for the Food and Beverage healthier ingredient alternatives. industry. This trend has accelerated amid the pandemic as plant-based meat alternative providers experienced Meat and Plant-based Meat Alternative Sales historic sales levels in Q3 driven by panic-buying. While Plant-based meat sales are up significantly YOY despite consumers increasingly sought healthy meat alternatives normalizing after a large spike at the height of the at the height of the pandemic, plant-based food sales pandemic in March have also demonstrated sequential pre-pandemic growth, Conventional Meat Plant-based Meat Alternatives increasing 29% in 2019 from 2017, according to the Plant Based Foods Association.4 Capstone believes that 300% specialty chemical companies will continue to formulate new methods of enhancing the health and sustainability 231% of food and beverage ingredients through healthier 200% alternative inputs to capture elevated demand in the 164% plant-based food end market. 159% 119% The trend has also increased demand for low calorie sugar 90% alternatives. Notably, the market share for natural 100% sweeteners is projected to reach $12.5 billion by 2026, 5 Percent Change Sales (YOY) in 40% 37% 39% according to Global Market Insights. Specialty chemicals 23% 20% producers that have pivoted investment toward food ingredients with low health-risk profiles have benefitted 0% from the low-sugar megatrend. This is evidenced by Mar Apr May Jun July growth in Tate & Lyle’s (LSE:TATE) Food & Beverage segment amid the pandemic. “Food & Beverage Source: Nielsen Solutions continues to perform well and benefit from consumers seeking healthier alternatives from their food and drink. Consumers are looking for more sugar and Key Performance Indicators calorie-reduced products, cleaner labels and more natural ingredients as well as improved texture and taste,” said Nick Hampton, Chief Executive Officer and Executive Pivoting Towards Clean Foods: 6 Director of Tate & Lyle, in an earnings call. Chemical companies serving the food industry have invested in cleaner and In addition to increased research and development healthier products. investment, industry participants have pursued strategic acquisitions in order to augment exposure to the growing market for healthy sweetener alternatives. This is Investing in R&D: Companies have evidenced by International Flavors & Fragrances’ invested in research and development in (NYSE:IFF) $26.5 billion acquisition of DuPont de Nemours’ order to enhance the health and Nutrition & Biosciences business (February 2021). sustainability of products. DuPont’s Nutrition & Biosciences business provides healthy and sustainable solutions for the food, beverage, Acquiring New Business: Companies dietary supplement, and pharmaceutical industries. have utilized M&A to bolster natural and Through the acquisition, IFF has expanded its global reach organic ingredient formulation capabilities. and capabilities to create solutions for healthier products, according to a press release.7 Likewise, Ingredion Incorporated (NYSE:INGR) acquired PureCircle (July 2020, Source: Capital IQ, Company Press Releases, and Capstone Research

4 Chemicals | March 2021

OIL & GAS IMPACT ON FEEDSTOCKS

U.S. oil and gas prices have recovered, reaching pre-pandemic levels after experiencing significant declines attributed to supply and demand disruptions in 2020. In response to low prices, producers were forced to pause drilling activity resulting in a decline in oil and natural gas production. Higher volumes of natural gas in storage following production records in 2018 and 2019 added to the downward pressure on natural gas prices in 2020. In 2021, U.S. natural gas production is estimated to decline by another 2% averaging 95.9 billion cubic feet per day (Bcf/d) and U.S. crude oil production is estimated to average 11.1 million barrels per day (b/d) in 2021, down 0.2 million b/d from 2020, according to the U.S. Energy Information Administration (EIA).8

In recent years, the U.S. has experienced strong petrochemical growth driven by an abundant supply of ethane feedstock which is a less-costly substitute for oil-derived naphtha feedstock. Ethane is a leading chemical input derived from natural gas that is used to produce ethylene. The U.S. has a feedstock advantage for export competitiveness over manufacturers that only have access to higher-cost naphtha feedstock. However, the pandemic has forced oil and gas producers to shut down resulting in a decline in the ethane feedstock supply and a corresponding increase in U.S. ethane prices.

West Texas Intermediate $160 Crude Spot Price $120 Recovers in February $80 Crude oil prices have rebounded to $99/barrel, $40 reaching pre-pandemic levels in February after $0 declining to -$60/barrel in April. Recovering demand -$40 U.S. Dollars Per Barrel and paused drilling activity have driven the increase in -$80 oil prices.

Note: Year-to-date (YTD) ended February 18 and shaded area indicates post-pandemic declaration Source: FactSet and Capstone Research

Henry Hub Natural Gas $6 Spot Price Eclipses $5 $3/Mmbtu in February $4 Following significant losses in September due to a robust $3 storage injection, natural gas $2 prices have experienced a $/Mmbtu resurgence fueled by tightening supply and $1 demand fundamentals. $0

$/Mmbtu=dollars per million British thermal units Note: Year-to-date (YTD) ended February 18 and shaded area indicates post-pandemic declaration Source: FactSet

5 Chemicals | March 2021

M&A OVERVIEW

Merger and acquisition (M&A) activity declined 14.2% Chemicals M&A Volume YOY in the Chemicals industry in 2020 as COVID-19 M&A activity exceeds prior year levels in 2021 YTD, headwinds resulted in drastic drops in transaction volume providing optimism for a healthy deal environment for in Q2 (29.8%) and Q3 (53.8%). However, transaction the remainder of the year volume normalized and exceeded prior year levels in Q4, demonstrating the industry’s resilience. M&A activity has 2019 2020 2021 YTD continued to surge through YTD 2021, increasing 42.9% 120 from the same period in 2020. 90 Strategic buyers have accounted for 67.1% of 2021 YTD 70 64 65 transaction activity as industry participants continue to 5961 utilize M&A to form synergies and bolster service 60 48 47 offerings. Several transformative strategic deals have 33 occurred in 2021 so far, including Cerberus Capital 30

Transaction Volume 30 Management and Koch Minerals’ joint agreement to acquire PQ Group’s (NYSE:PQG) Performance Chemical Business, (March 2021, $1.1 billion) and Lanxess AG’s 0 (XTRA:LXS) binding agreement to acquire Emerald Kalama Q1 Q2 Q3 Q4 Chemical (February 2021, $1.1 billion).

Private equity buyers (PE) continue to display interest in 2021 YTD Buyer Breakdown the space, accounting for 32.9% of deal activity in 2021 YTD. Add-on deals have composed 20.0% of total 2021 volume as PE-backed companies have used tuck-in acquisitions to enhance their product portfolios and STRATEGIC 20.0% expand geographically, evidenced by USALCO’s Private acquisition of Al Chem/CalChem (January 2021). Through Public 37.1% the acquisition, USALCO, a platform company of H.I.G. FINANCIAL 12.9% capital, has expanded its product portfolio and end market applications while further establishing its national Add-on Platform presence, according to a press release.9 With a recovering debt environment, PE firms have continued to pursue 30.0% platform deals, accounting for 12.9% of 2021 YTD volume. This is exemplified by Bain Capital and Cinven Limited’s definitive agreement on a joint acquisition of Lonza Specialty Ingredients (February 2021, $4.7 billion). Note: Year-to-date ended March 2 Source: Capital IQ, PitchBook, FactSet, and Capstone Research

Doug Usifer, Managing Director “Several categories have fared very well through the 2020 pandemic driven by strong demand and high performance. These categories include specialty food ingredients, antimicrobial chemicals, and specialties with unique efficacy such as food additives and preservatives, chemical inhibitors and stabilizers, and high-performance plastics. We are seeing strong M&A activity driven by pent-up demand and excess capital that potential buyers are eager to deploy. Companies that remained relatively stable or grew during the pandemic will be viewed favorably from a valuation perspective.”

6 Chemicals | March 2021

NOTABLE TRANSACTIONS

Several notable transactions have been announced or completed in the industry in 2020 and 2021 YTD. Select transactions are outlined below, followed by a more comprehensive list on the following pages.

LANXESS Aktiengesellschaft to acquire Emerald Kalama Chemical, LLC (February 2021, $1.1 Billion)

LANXESS Aktiengesellschaft (XTRA:LXS), a global specialty chemicals company based in Germany, has signed a binding agreement to acquire Emerald Kalama Chemical, LLC for an enterprise value of $1.1 billion (11.9x EBITDA), according to a press release.10 U.S.-based Emerald Kalama Chemical is a leading global manufacturer of specialty chemicals that generates approximately 75% of its turnover in the To acquire consumer segment. LANXESS will finance the acquisition from existing liquidity.

Through the transaction, LANXESS will enlarge its presence in the U.S. and expand its portfolio of antimicrobial inputs with applications in consumer protection products and animal hygiene. “We are gaining further momentum in our growth course. The businesses of Emerald Kalama Chemical are an ideal fit for us. We will further strengthen our Consumer Protection segment and open up new application areas with strong margins, for example in the food industry and animal health sector,” said Matthias Zachert, Chairman of the Board of Management of LANXESS, in the press release.

Bain Capital Private Equity, LP and Cinven Limited acquire Lonza Specialty Ingredients (February 2021, $4.7 Billion)

Bain Capital Private Equity, LP and Cinven Limited have entered into definitive agreements to acquire Lonza Specialty Ingredients (“LSI”) from Lonza AG, for a total enterprise value of $4.7 billion, according and to a press release.11 Switzerland-based LSI manufactures a variety of differentiated specialty chemicals for microbial control solutions. The company has a particularly strong presence in the Professional Hygiene and Home & Personal Care end markets.

To acquire Through the joint acquisition, LSI will have the financial capabilities to continue to invest in research and development to enhance its product portfolio. Additionally, Bain Capital and Cinven Limited indicated that LSI will serve as a platform to pursue further acquisitions in the Microbial Control market. “Our strategy is to reinforce the company’s market position, to accelerate growth through further investment in R&D and innovation, and to use LSI as a platform for further industry consolidation in line with Bain Capital’s and Cinven’s strategies in other sectors,” said David Danon, Managing Director at Bain Capital, in the press release.

Tate & Lyle PLC acquires Sweet Green Fields Llc (December 2020, Undisclosed)

Tate & Lyle (LSE:TATE), a leading provider of food and beverage ingredients solutions, has acquired remaining shares of Sweet Green Fields, a leading stevia producer, for an undisclosed sum. Tate & Lyle formed a partnership with Sweet Green Fields in 2017 and then acquired 15% equity in the company Acquires the following year. Stevia is one of the fastest growing low-calorie sweeteners internationally. Notably, product launches that contain stevia grew by a compound annual growth rate of 15% between 2015 and 2019, according to a press release.12

The acquisition of Sweet Green Fields further solidifies Tate & Lyle’s status as a leading provider of innovative sweetener solutions. Additionally, the transaction simplifies the existing relationship between these two companies, creating a fully integrated supply chain and commercial organization, unified research and development capabilities, and the capacity to accelerate innovation and improve production technologies, according to the press release. 7 Chemicals | March 2021

SELECT TRANSACTIONS

Enterprise EV / LTM Date Target Acquirer Target Business Description Value (mm) Revenue EBITDA

PQ Group Cerberus Capital; 02/18/21 Offers performance chemicals. $1,100.0 7.7x - (NYSE:PQG) Koch Minerals

W.R. Grace & Co. 02/25/21 Assets of Albemarle Manufactures specialty chemicals. $570.0 - - (NYSE:GRA)

Manufactures and sells architectural and protective 02/18/21 Wattyl Hempel paints and coatings. ---

Avery Dennison Manufactures and offers pressure-sensitive adhesive 02/15/21 JDC Solutions $24.0 0.8x - (NYSE:AVY) coated films

Emerald Develops, manufactures, and markets chemical 02/14/21 LANXESS (XTRA:LXS) $1,075.0 2.5x 11.9x Performance intermediates, specialty chemicals, and plastics.

Lonza Specialty Manufactures specialty chemicals for microbial control 02/08/21 Bain Capital; Cinven $4,671.1 - - Ingredients solutions.

Verdesian Life Develops and produces nutrient management and 01/19/21 AEA Investors --- Sciences efficiency technologies.

PPG Industries 01/05/21 VersaFlex Manufactures and supplies protective coatings. --- (NYSE:PPG)

RÜTGERS CPS Performance 12/31/20 Manufactures and distributes polymer-based products. $78.0 - - Polymers Materials

FONA McCormick & Co. Develops and produces flavors for food, beverage, and 12/30/20 $710.0 - - International (NYSE:MKC) nutritional companies worldwide.

Industrial Soap 12/30/20 Imperial Dade Distributes janitorial products in the United States. --- Company

12/30/20 Desai-Aire GracoRoberts Distributes chemicals and other aerospace equipment. ---

Assets of Canopy GrowGeneration 12/23/20 Distributes silicic acid-enriched fertilizers. --- Crop (NAS:GRWG)

New Nautical Akzo Nobel Develops and manufactures antifouling paints and 12/23/20 --- Coatings (ENXTAM:AKZA) coatings.

Seal for Life Manufactures heat shrinkable sleeves, adhesives, and 12/23/20 Shawcor (TSX:SCL) $91.5 1.1x - Industries liquid coatings.

Assets of Prime 12/23/20 Albaugh Manufactures agricultural and specialty pesticide. --- Source

John W. Stone Oil 12/22/20 Mega Lubricants Produces and wholesales petroleum products. $22.0 - - Distributor

Blends, manufactures, repackages, and distributes 12/21/20 Alpha Chemical Brenntag Canada cleaners and disinfectants in Atlantic Canada. ---

12/21/20 IsleChem Aceto Manufactures performance chemical products. ---

Assets of Green 12/15/20 Hereford Ethanol Manufactures chemicals. $115.0 - - Plains Hereford

Assets of Arkema 12/14/20 Trinseo (NYSE:TSE) Manufactures chemicals. $1,360.0 2.2x 6.2x (ENXTPA:AKE)

Response Manufactures additive for national defense, energy, 12/07/20 Bell Textron --- Technologies aerospace, automotive, and transportation industry.

Source: Capital IQ, PitchBook, FactSet, and Capstone Research 8 Chemicals | March 2021

SELECT TRANSACTIONS (CONTINUED)

Enterprise EV / LTM Date Target Acquirer Target Business Description Value (mm) Revenue EBITDA

Gabriel Huntsman Corp. Manufactures specialty additives and epoxy curing 12/07/20 $250.0 2.4x 11.0x Performance (NYSE:HUN) agents.

Assets of DURECT Evonik Industries 12/07/20 Manufactures absorbable polymers product. $15.0 - - (Nasdaq:DRRX) (XTRA:EVK)

Colorado Arkema. Develops resin formulations and photopolymer 12/04/20 --- Photopolymer (ENXTPA:AKE) materials.

Assets of Winslow 12/01/20 Protech Chimie Manufactures liquid coatings. - - - Browning

Tate & Lyle 12/01/20 Sweet Green Fields Distributes janitorial equipment. --- (LSE:TATE)

PPG Industries Manufactures and supplies pavement marking 11/30/20 Ennis-Flint $1,150.0 - - (NYSE:PPG) materials.

INEOS Olefins & 11/24/20 Gemini HDPE Manufactures high density polyethylene chemicals. $808.0 - - Polymers USA

Assets of Sensient 11/23/20 Symrise (XTRA:SY1) Manufactures fragrances. --- Technologies

11/19/20 Kano Laboratories Gryphon Investors Producer of oils and lubricants. ---

PureCycle Roth CH Acquisition 11/16/20 Produces recycled polypropylene. $1,206.0 - - Technologies I Co. (NAS:ROCH)

W. R. Grace & Co. 40 North 11/09/20 Sells specialty chemicals and materials worldwide. $5,991.4 3.5x 14.7x (NYSE:GRA) Management

Fuchs Petrolub Manufactures silicone and synthetic greases 11/02/20 PolySi Technologies --- (XTRA:FPE3) and lubricants.

Core One Labs 10/30/20 High Tower Capital Manufactures and sells cannabis-infused strips. $6.0 - - (CNSX:COOL)

Assets of NOVA ALPEK 10/19/20 Manufactures polystyrene and resin. --- Chemicals (BMV:ALPEK A)

10/15/20 Potters Industries The Jordan Co. Manufactures glass beads for highway safety. $650.0 - -

ANGUS Chemical Manufactures and distributes nitroalkanes and 10/13/20 Ardian $2,250.0 6.7x - Company their derivatives.

Shrieve Chemical Distributes styrene, acrylates, acetic acid, glycerin and 10/07/20 CLP Chemicals --- Company other niche chemicals.

10/07/20 Dallas Plastics Sole Source Capital Extrudes and manufactures polyethylene films ---

Assets of Sasol LyondellBasell 10/02/20 Produces linear-low density polyethylene and ethane. --- Chemicals (NYSE:LYB)

Fire Retardant Engages in production, development, and testing of 10/01/20 UFP Retail $5.9 0.9x - Chemical Tech. chemicals, fire retardants, and water repellants.

Poteet Printing Manufactures and sells water-based inks for 10/01/20 Flint Group --- Systems flexographic applications.

Applus Services 09/30/20 Reliable Analysis Provides chemical and thermal analysis services. $78.7 2.8x - (BME:APPS)

Source: Capital IQ, PitchBook, FactSet, and Capstone Research 9 Chemicals | March 2021

PUBLIC COMPANY TRADING & OPERATING DATA

Price % 52 Wk Market Enterprise LTM EV / LTM Company 02/16/21 High Cap Value Revenue EBITDA Margin Revenue EBITDA Akzo Nobel N.V. $104.00 92.2% $19,644.2 $21,484.8 $10,055.2 $1,528.9 15.2% 2.1x 14.1x

Arkema S.A. $108.77 90.3% $8,277.0 $9,754.3 $9,337.7 $1,592.3 17.1% 1.0x 6.1x Asahi Kasei Corporation $11.11 92.6% $15,415.2 $20,145.3 $20,345.3 $2,889.5 14.2% 1.0x 7.0x BASF SE $81.92 97.7% $75,264.5 $95,126.5 $68,024.9 $2,087.8 3.1% 1.4x NM Bayer Aktiengesellschaft $66.24 71.8% $64,896.1 $98,875.3 $49,500.9 NM NA 2.0x NM Dow Inc. $58.75 95.8% $43,705.0 $58,352.0 $38,542.0 $6,299.0 16.3% 1.5x 9.3x DuPont de Nemours, Inc. $70.99 81.3% $38,198.9 $58,673.9 $20,397.0 $5,203.0 25.5% 2.9x 11.3x Eastman Chemical Company $110.32 99.2% $14,992.5 $20,478.5 $8,473.0 $1,558.0 18.4% 2.4x 13.1x Exxon Mobil Corporation $52.04 85.8% $220,285.3 $287,464.3 $181,502.0 NM 14.8% 1.6x NM Formosa Plastics Corporation $3.44 97.2% $20,390.4 $20,545.1 $6,207.2 $724.0 11.7% 3.3x NM LG Chem, Ltd. $883.55 93.1% $64,581.4 $72,229.0 $25,641.9 $3,559.2 13.9% 2.8x 20.3x LyondellBasell Industries N.V. $97.99 98.1% $32,720.7 $47,567.7 $27,753.0 $4,384.0 15.8% 1.7x 10.9x PPG Industries, Inc. $137.35 89.3% $32,442.7 $36,714.7 $13,834.0 $2,256.0 16.3% 2.7x 16.3x SABIC $27.46 96.8% $82,375.8 $91,338.1 $31,175.7 $5,116.9 16.4% 2.9x 17.9x Sinopec Shanghai Petrochemical $0.24 82.5% $5,005.4 $4,607.6 $11,770.4 $24.4 0.2% 0.4x NM

Mean 14.2% 2.0x 12.6x

EV = enterprise value; LTM = last twelve months Median 15.5% 2.0x 12.2x $ in millions, except per share data NM = Not meaningful Harmonic Mean 2.4% 1.5x 7.9x

Chemicals Index Average EBITDA Multiple More than Doubles YOY Chemicals Index DJIA S&P 500 - Chemicals Industry

30x

20x 17.4x 16.2x

12.9x 10x EBITDA Multiples

0x Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21

Index includes: AKZA, AKE, 3407, BAS, DOW, DD, EMN, 1301, A051910, LYB, PPG, 2010, 338 Source: Capital IQ as of March 2, 2021 10 Chemicals | March 2021

CHEMICALS REPORT CONTRIBUTORS

David Bench Managing Director [email protected] | 949-734-7888

David is a Managing Director based out of Orange County. Prior to Capstone Headwaters, David managed the Western region for Morgan Stanley Smith Barney’s Capital Strategies Group and its predecessor, Citi Capital Strategies. David has focused on middle market investment banking for nearly 32 years and has been the lead banker in over 250 M&A transactions involving both domestic and foreign corporate buyers, as well as leveraged recaps with private equity sponsors. David’s achievements in investment banking have gained national recognition by The M&A Advisor: one of his transactions was awarded the “Private Equity Deal of the Year,” while another was recognized as the “Energy Deal of the Year.” Mr. Bench has also been awarded “Middle Market Financing Professional of the Year,” an award recognizing M&A’s most accomplished professionals. Mr. Bench holds a BS and an MBA in Finance from Brigham Young University. He is a Series 7 and 63 Registered Securities Representative and a Series 24 Registered Securities Principal.

Doug Usifer Managing Director [email protected] | 802-735-2330

Dr. Doug Usifer, Managing Director, joined Capstone Headwaters from Atlas Advisors where he focused on the firm’s Industrials practice. He has over 20 years of experience in investment banking and industrial sectors including chemicals, plastics, waste and scrap metal. Prior to Atlas, Doug worked at National Starch as Business Director, Food Emulsions and Encapsulation, where he was General Manager of a $40MM global specialty food ingredients business. He also worked on M&A transactions including National Starch's acquisition of Penford's resistant starch business.

Prior to National Starch, Doug worked at Engelhard Corporation in several capacities, including Business Development Manager, Corporate New Ventures; Marketing Manager, Special Effect Pigments; Manager, Technology and Market Development, Performance Additives/Specialty Minerals. While at Engelhard, he worked on M&A transactions including the acquisition of Mearl Corp, a US producer of pearlescent pigments and iridescent films. He previously worked at Cambrex Corporation (pharmaceutical fine chemicals) and Hoechst Celanese (electronic products and plastics).

Doug holds an executive MBA in Finance from Rutgers University, Ph.D. and MS degrees in Organic Chemistry from Rensselaer Polytechnic Institute, and a BA in Chemistry from Saint Michael's College.

2020 2020 2019 2019 2019

MIDDLE MARKET US MIDDLE MARKET INVESTMENT BANKING FIRM INVESTMENT BANKING FIRM INVESTMENT BANKING FIRM INVESTMENT BANK INVESTMENT BANK OF THE YEAR OF THE YEAR OF THE YEAR OF THE YEAR OF THE YEAR

INTERNATIONAL AWARDS TURNAROUND AWARDS

11 Chemicals | March 2021

CHEMICALS REPORT CONTRIBUTORS

Tracy Patch Director [email protected] | 949-220-0540

Tracy is a Director in the Orange County office, supporting the management of the Western Region. Prior to Capstone Headwaters, Tracy worked as a senior banking professional in Morgan Stanley Smith Barney’s Capital Strategies Group and its predecessor, Citi Capital Strategies. She possesses 17 years of experience in middle market investment banking, working on both domestic and cross- border transactions. Her previous finance experience includes working in the hedge fund industry with Collins/Bay Island Securities LLC and Talisman Capital. Prior to that, Mrs. Patch worked with institutional fixed income sales at Vining Sparks IBG, LP and Robert Thomas Securities, Inc. She also was a manager at The Disney Company. Mrs. Patch holds an MBA from Pepperdine University and a BS in Finance from Miami University of Ohio. She is a Series 7 and 63 Registered Securities Representative.

Christopher Cardinale Vice President [email protected] | 949-220-0537

Christopher is a Vice President in the Orange County office. He supports management and clients in the Western Region. Christopher is engaged in the execution and advisory of mergers, acquisitions and strategic capital raises. Prior to joining Capstone Headwaters, he was an associate with a boutique M&A firm focused on valuation, M&A advisory, corporate finance, acquisition target research and exit-planning strategy. His industry experience includes manufacturing, healthcare, TMT and consumer. Christopher was also a research analyst in the M&A department at United Capital Financial Advisors.HeearnedaBAfromtheUniversityofSan Diego. Christopher is a FINRA Series 79 and 63 Registered Securities Representative.

John Wilson Associate [email protected] | 802-863-2700

John is an Associate in the Burlington office. He is engaged in the execution and advisory of mergers, acquisitions and strategic capital raises. Prior to joining Capstone Headwaters, he was with Goldman Sachs Asset Management in their fixed income defined contribution division. His industry experience includes Chemicals and Waste. He earned a BS and an MBA from the University of Vermont. John is a FINRA Series 79 Registered Securities Representative.

Lucas LaCroce Research Analyst [email protected] | 617-619-3331

Luke serves as a Research Analyst at Capstone Headwaters primarily focusing on the Industrials and Business Services industries. Before joining the firm’s corporate Research Team, Luke was an intern at DLG Wealth Management, Valpey Financial Services, and VIGILANT Capital Management where he performed financial analysis on equities, evaluated exchange traded funds and mutual funds, and determined the impact of proposed legislation on financial planning strategies. Luke earned a BA in Economics and English from Union College. 12 Chemicals | March 2021

FIRM TRACK RECORD

Capstone Headwaters maintains an active Industrial & Manufacturing practice in the middle market, with Chemicals being an important vertical within our focus. This market presence allows Capstone Headwaters to provide chemical companies with up-to-date market data and access to key decision makers among the industry’s most active acquirers and investors.

CONFIDENTIAL CONFIDENTIAL D.B. Western - Texas corporate sale corporate sale (IN PROCESS) (IN PROCESS) has been acquired by

Sanitation Products Food Ingredients Provider Distributor

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13 Chemicals | March 2021

CITATIONS

1. American Chemistry Council, “Chemical Industry Outlook: Recover from the COVID-19 Global Recession,” https://www.americanchemistry.com/Media/PressReleasesTranscripts/ACC-news-releases/Chemical-Industry-Outlook-Recovery-from-the-COVID-19- Global Recession.html#:~:text=Total%20chemicals%20trade%20is%20projected,to%20%24105.5%20billion%20in%202021, accessed February 24, 2021. 2. Grand View Research, “Plastic Resin Market Size, Share & Trends Analysis Report By Product,” https://www.grandviewresearch.com/industry- analysis/plastic-resins-market, accessed February 24, 2021. 3. Grand View Research, “Plastic Resin Market Size, Share & Trends Analysis Report By Product,” https://www.grandviewresearch.com/industry- analysis/specialty-chemicals-market, accessed March 4, 2021. 4. Plant Based Food Association, “New Data Shows Plant-Based Food Outpacing Total Food Sales During COVID-19,” https://plantbasedfoods.org/plant-based-food-outpaces-total-food-sales-during-covid19/, accessed February 8, 2021. 5. Global Market Insights, “Natural Sweeteners Market size to exceed $12.5bn by 2026,” https://www.gminsights.com/pressrelease/natural-sweeteners- market?utm_source=globenewswire.com&utm_medium=referral&utm_campaign=Paid_globenewswire, accessed February 8, 2021. 6. Tate & Lyle “Half Year Results,” https://www.tateandlyle.com/sites/default/files/2020-11/tatehy2120201105transcript.pdf, accessed February 8, 2021. 7. IFF, “IFF to Merge with DuPont’s Nutrition & Biosciences Business,” https://ir.iff.com/news-releases/news-release-details/iff-merge-duponts- nutrition-biosciences-business, accessed February 8, 2021. 8. U.S. Energy Information Administration, “Short-term Energy Outlook,” https://www.eia.gov/outlooks/steo/, accessed February 8, 2021. 9. H.I.G. Capital “USALCO Completes Acquisition of AlChem and CalCHEM,” https://higcapital.com/news/release/usalco-completes-acquisition-of- alchem-and-calchem, accessed February 11, 2021. 10. LANXESS, “LANXESS signs contract to acquire Emerald Kalama Chemical,” https://higcapital.com/news/release/usalco-completes-acquisition-of- alchem-and-calchem, accessed March 8, 2021. 11. Bain Capital, “Bain Capital Private Equity and Cinven enter into definitive agreements to acquire Lonza Specialty Ingredients,” https://www.baincapital.com/news/bain-capital-private-equity-and-cinven-enter-definitive-agreements-acquire-lonza-specialty, accessed March 8, 2021. 12. Food Dive, “Tate & Lyle acquires stevia manufacturer Sweet Green Fields,” https://www.fooddive.com/news/tate-lyle-acquires-stevia-manufacturer- sweet-green-fields/591502/, accessed February 8, 2021.

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