ROGERS CORPORATION

(ROG)
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Delayed Nyse  -  05/25 04:00:01 pm EDT
260.34 USD   +0.18%
04/29ROGERS CORP Management's Discussion and Analysis of Results of Operations and Financial Position (form 10-Q)
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ROGERS CORP : Other Events (form 8-K)

01/14/2022 | 05:15pm EDT
Item 8.01 Other Events
As previously disclosed, on November 1, 2021, Rogers Corporation, a
Massachusetts corporation ("Rogers" or the "Company"), entered into an Agreement
and Plan of Merger (the "Merger Agreement") with DuPont de Nemours,
Inc.,Delaware corporation ("DuPont" or "Parent"), and Cardinalis Merger Sub,
Inc., a Delaware corporation and a wholly owned subsidiary of Parent ("Merger
Sub"), whereby, upon the terms and subject to the conditions set forth in the
Merger Agreement, the Company will merge with and into Merger Sub (the
"Merger"). In connection with the Merger Agreement, on December 16, 2021, the
Company filed a definitive proxy statement (the "Proxy Statement") with the U.S.
Securities and Exchange Commission (the "SEC").

Litigation Relating to the Merger


As previously disclosed in the Proxy Statement, as of December 16, 2021, two
purported shareholders of the Company filed actions in the United States
District Court for the Southern District of New York (the "Preliminary Proxy
Complaints") against the Company and members of the Company's Board. The
Preliminary Proxy Complaints are captioned Shiva Stein v. Rogers Corporation et.
al., Case No. 1:21-cv-10325 and Alex Ciccotelli v. Rogers Corporation et. al.,
Case No. 1:21-cv-10723.

Following the filing of the Proxy Statement and prior to the filing of this
Current Report on Form 8-K, six additional complaints have been filed against
the Company and members of the Company's Board in United States District Courts
(the "Definitive Proxy Complaints" and, collectively, with the Preliminary Proxy
Complaints, the "Complaints"). Two Definitive Proxy Complaints have been filed
in the United States District Court for the District of Delaware and are
captioned Finger v. Rogers Corporation, et. al., Case No. 21-cv-01798 and Kent
v. Rogers Corporation et. al., Case No. 21-cv-01806. One Definitive Proxy
Complaint has been filed in the United States District Court for the Eastern
District of Pennsylvania and is captioned Hopkins v. Rogers Corporation et. al.,
Case No. 21-cv-05613. One Definitive Proxy Complaint has been filed in the
United States District Court for the Eastern District of New York and is
captioned Woods v. Rogers Corporation et. al., Case No. 21-cv-07109. Two
Definitive Proxy Complaints have been filed in the United States District Court
for the Southern District of New York and are captioned Parshall v. Rogers
Corporation et. al., Case No. 21-cv-11095, and Raul v. Rogers Corporation et
al., Case No. 22-cv-00368.

In general, the Complaints allege that the defendants violated Sections 14(a)
(and Rule 14a-9 promulgated thereunder) and 20(a) of the Exchange Act by, among
other things, including allegedly materially misleading or incomplete disclosure
with respect to certain financial projections of the Company and certain
financial analyses of the Company's financial advisor in the Proxy Statement or
in the preliminary proxy statement filed by the Company on December 1, 2021. One
Complaint further alleges that the Company's preliminary proxy statement
allegedly omitted or misrepresented information regarding alleged potential
conflicts of interest among certain Company directors and executive officers
relating to possible continued employment with, or right to purchase or
participate in equity of, the combined company following consummation of the
merger. The plaintiffs in the Complaints seek, among other things, injunctive
relief, money damages and the costs of the Complaints, including reasonable
attorneys' and experts' fees.

The Company believes that the claims asserted in the above-described actions are
without merit and that no supplemental disclosure is required under applicable
law. However, in order to moot the unmeritorious disclosure claims, to avoid the
risk of the above-described actions delaying or adversely affecting the Merger
and to minimize the costs, risks and uncertainties inherent in litigation,
without admitting any liability or wrongdoing, the Company has determined to
voluntarily supplement the Proxy Statement as described in this Current Report
on Form 8-K. Nothing in this Current Report on Form 8-K shall be deemed an
admission of the legal necessity or materiality under applicable laws of any of
the disclosures set forth herein. The Company specifically denies all
allegations in the above-referenced actions, including allegations that any
additional disclosure was or is required, and believes that the supplemental
disclosures contained herein are not material.

As of the date of this Current Report on Form 8-K, six of the eight plaintiffs have agreed to dismiss the Complaints in light of, among other things, the supplemental disclosures contained herein.

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Supplemental Disclosures


The following supplemental disclosures should be read in conjunction with the
Proxy Statement, which should be read in its entirety. To the extent that
information herein differs from or updates information contained in the Proxy
Statement, the information contained herein supersedes the information contained
in the Proxy Statement. All page references are to pages in the Proxy Statement,
and defined terms used but not defined herein have the meanings set forth in the
Proxy Statement. For clarity, new text within restated paragraphs and tables
from the Proxy Statement are highlighted with bold, underlined text and
stricken-through text shows text being deleted to a referenced disclosure in the
Proxy Statement.

The section of the Proxy Statement entitled "Opinion of Financial Advisor" is
amended and supplemented as follows. The second paragraph under the sub-heading
"Public Trading Multiples" on page 37 of the Proxy Statement is hereby
supplemented by adding the following as the last sentence of such paragraph and
the following table below such paragraph:

The below table summarizes the companies, the metrics and the multiples employed
in J.P. Morgan's analysis.

Electronic materials                     CY22E FV / EBITDA       CY22E P / E
CMC Materials, Inc.                            12.2x                16.7x
Entegris, Inc.                                 25.1x                36.2x
II-VI, Inc.                                    11.2x                13.4x
Ingevity Corporation                            9.0x                13.0x
Quaker Chemical Corporation                    16.6x                28.7x
Wolfspeed, Inc.                                 NM1                  NM1

Electronic components
Advanced Energy Industries, Inc.               12.0x                16.1x
FormFactor, Inc.                               15.6x                22.5x
Graco, Inc.                                    19.9x                28.5x
Helios Technologies, Inc.                      15.8x                22.2x
Idex Corporation                               21.3x                31.7x
Littlefuse, Inc.                               14.3x                22.5x
Nordson Corporation                            19.3x                27.9x
Teledyne Technologies Incorporated             19.0x                29.7x



1NM means not meaningful because the applicable multiple is either less than 0.0x or greater than 75.0x.

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The table following the first paragraph under the sub-heading "Selected Transaction Analysis" on pages 37 and 38 of the Proxy Statement is hereby supplemented by amending and restating the table on such pages as follows:

Announcement Date                            Acquiror                             Target                      FV / LTM EBITDA
September 2021                         Materion Corporation              HCS-Electronic Materials                  13.0x
July 2021                              MKS Instruments, Inc.                 Atotech Limited                       19.2x
June 2021                             Element Solutions, Inc.              Coventya Holding SAS                    14.0x
March 2021                            DuPont de Nemours, Inc.          Laird Performance Materials                 15.0x
April 2019                          Parker Hannifin Corporation              LORD Corporation                      16.6x
April 2019                                  Merck KGaA                    Versum Materials, Inc.                   14.4x
                                      Cabot Microelectronics
August 2018                                 Corporation                    KMG Chemicals, Inc.                     13.2x
July 2018                            Goldman Sachs Group, Inc.               BOYD Corporation                      12.5x
June 2018                                 Entegris, Inc.                      SAES Pure Gas                        10.8x
March 2018                          Advent International Corp.                  Laird PLC.                          9.8x
October 2017                                BC Partners                       CeramTec GmbH                        13.3x
April 2017                          Quaker Chemical Corporation        Houghton International Inc.                 11.8x
April 2017                              KMG Chemicals, Inc.                    Flowchem LLC                        11.5x



The first paragraph under the sub-heading "Selected Transaction Analysis" on
page 38 of the Proxy Statement is hereby supplemented by amending and restating
such paragraph as follows:

Based on the results of this analysis and other factors J.P. Morgan considered
appropriate, J.P. Morgan selected a multiple reference range of 11.0x to 19.5x
for LTM FV / EBITDA, and applied this reference range to the LTM EBITDA for the
Company as of September 30, 2021, which includes Silicone Engineering, of $236
million as provided by the Company's management in its management projections.
This resulted in an implied equity value range of $139.00 to $245.00 per share
(in each case, rounded to the nearest $1.00) for the Company, compared to (i)
the DuPont offer price of $277.00 per share, and (ii) the closing price of
Company capital stock on October 29, 2021 of $201.12 per share.

The paragraph under the sub-heading "Discounted Cash Flow Analysis" on page 38
of the Proxy Statement is hereby supplemented by amending and restating such
paragraph as follows:

J.P. Morgan conducted a discounted cash flow analysis for the purpose of
determining the implied fully diluted equity value per share for the Company's
capital stock. J.P. Morgan calculated the unlevered free cash flows that the
Company is expected to generate from Q4 2021 through 2026 based upon financial
projections prepared by the management of the Company, which are summarized in
the section entitled "The Merger-Financial Projections" beginning on page 40 of
this proxy statement. J.P. Morgan also calculated a range of terminal asset
values of the Company at the end of the six-year period ending in 2026 by
applying a perpetual growth rate ranging from 4.0% to 5.0%, which range J. P.
Morgan determined on the basis of its professional judgment and experience, to
of the unlevered free cash flow of the Company during the terminal year of the
six year period. 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 9.0% to 10.5%, which were chosen by J.P. Morgan based upon an analysis of
the weighted average cost of capital of the Company, taking into account
macro-economic assumptions, estimates of risk, the Company's capital structure
and other factors that J.P. Morgan deemed appropriate. The present value of the
unlevered free cash flows and the range of terminal asset values were then
adjusted for the Company's net cash (taking into account pension liabilities) of
$43 million. Based on the results of this analysis, J.P. Morgan arrived at a
range of equity values of between $202.00 and $330.00 per share (in each case,
rounded to the nearest $1.00) for the Company's capital stock on a stand-alone
basis (i.e., without synergies).

The second paragraph under the sub-heading "Other Information" on page 38 of the
Proxy Statement is hereby supplemented by amending and restating such paragraph
as follows:

Analyst Price Targets for the Company. For reference only and not as a component
of its fairness analyses, J.P. Morgan reviewed certain publicly available equity
research analyst share price targets adjusted to present value assuming a cost
of equity of 10.5% for Company capital stock using a discount rate of 10.5%,
which was chosen by J.P. Morgan based upon an analysis of the cost of equity of
the Company, and noted that the range of such

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price targets, rounded to the nearest $1.00, was $204.00 to $253.00 per share of
Company capital stock, in each case, as compared to (i) the DuPont offer price
of $277.00 per share, and (ii) the closing price of Company capital stock on
October 29, 2021 of $201.12 per share.

The section of the Proxy Statement entitled "Financial Projections" is amended and supplemented as follows:

(US$ in millions)                     2021E       2022E       2023E       2024E       2025E       2026E
Total Revenue                          $943       $1,105      $1,289      $1,497      $1,695      $1,969
Adjusted Net Income(1)                 $129        $166        $201        $243        $289        $357
Adjusted Earnings Per Share(2)        $6.81       $8.62       $10.21      $12.10      $14.13      $17.12
Adjusted EBITDA(3)                     $220        $279        $342        $409        $481        $579
Free Cash Flow(4)                      $148        $121        $174        $278        $381        $479


1."Adjusted Net Income", a non-GAAP financial measure, is defined as net income
excluding restructuring,   severance, impairment and other related costs,
acquisition and related integration costs, pension settlement charges,
asbestos-related charges, environmental accrual adjustments, amortization of
acquisition intangible assets, gains or losses on the sale or disposal of
property, plant and equipment, UTIS fire charges, and the related income tax
effect on these items.

2."Adjusted Earnings Per Share", a non-GAAP financial measure, is defined as
Adjusted Net Income per diluted share divided by adjusted weighted average
shares outstanding - diluted. The estimated Adjusted Earnings Per Share forecast
for the Company for fiscal year 2022 set forth in this table is the same as the
estimated earnings per share amount for the Company for fiscal year 2022
referred to in the section entitled "Opinion of Financial Advisor" beginning on
page 35 of this proxy statement.

3."Adjusted EBITDA", a non-GAAP financial measure, is defined as net income
earnings before interest, provision for income taxes, and depreciated and
amortization expense ("EBITDA"), adjusted to exclude stock-based compensation,
restructuring, severance, impairment and other related costs, and acquisition
and related integration costs, asbestos-related charges, environmental accrual
adjustments, gains or losses on the sale or disposal of property, plant and
equipment, UTIS fire charges and pension settlement charges. The adjusted EBITDA
forecast for the Company for fiscal year 2022 set forth in this table is the
same as the estimated EBITDA amount for the Company for fiscal year 2022
referred to in the section entitled "Opinion of Financial Advisor" beginning on
page 35 of this proxy statement.

4."Free Cash Flow" is defined as EBITDA less capital expenditures.

The Company approved the following free cash flow projections for use by J.P. Morgan in connection with its financial analysis and opinion, which were calculated as set forth below.

(US$ in Millions                  2021E       2022E       2023E       2024E       2025E       2026E
Unlevered Free Cash Flows          $59         $23         $47         $127        $219        $217


Unlevered free cash flow is defined on an annual basis as adjusted earnings before interest and taxes (Adj. EBIT), less taxes, plus depreciation and amortization, less capital expenditures, less stock-based compensation expense (net of tax), and less the increase in net working capital.

The section of the Proxy Statement entitled "Interests of Certain Persons in the Merger" is amended and supplemented by amending and restating the first paragraph in such section as follows:


In considering the recommendation of the Board with respect to the Merger
Agreement, you should be aware that the Company's directors and executive
officers have interests in the merger that may be different from, or in addition
to, the interests of our shareholders generally, as more fully described below.
The Board was aware of these interests and considered them, among other matters,
in reaching the determination that the Merger Agreement and the merger are in
the best interests of the Company and its shareholders and in making their
recommendations regarding approval of the Merger Agreement as described in the
section entitled "The Merger-Reasons for the Merger; Recommendation of the Board
of Directors" beginning on page 31. Except as set forth below in this "Interests
of Certain Persons in the Merger" section, none of the directors or executive
officers of the Company is receiving any other compensation in connection with
the Merger. In addition, there were no agreements, arrangements or
understandings at any time prior to the execution of the Merger Agreement
between any

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director or executive officer of the Company and Parent regarding employment with Parent following consummation of the Merger.

Additional Information and Where to Find It


This communication does not constitute a solicitation of any proxy, vote or
approval. Rogers intends to file with the Securities and Exchange Commission
("SEC") and mail to its shareholders a definitive proxy statement in connection
with the proposed transaction with DuPont. ROGERS' SHAREHOLDERS ARE URGED TO
READ CAREFULLY AND IN THEIR ENTIRETY THE PROXY STATEMENT AND ANY OTHER RELEVANT
DOCUMENTS THAT ARE FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT ROGERS AND THE PROPOSED MERGER.
Investors and shareholders may obtain a free copy of the proxy statement and
other documents filed with the SEC (when they became available) from the SEC's
website at www.sec.gov or by accessing the Rogers' website at
https://rogerscorp.com/investors.

Certain Information Concerning Participants


Rogers and its directors and executive officers may be deemed to be participants
in the solicitation of proxies from Rogers' shareholders with respect to the
proposed merger. Information about Rogers' directors and executive officers is
set forth in Rogers' definitive proxy statement for its 2021 Annual Meeting of
Shareholders, which was filed with the SEC on March 26, 2021, its Annual Report
on Form 10-K for the fiscal year ended December 31, 2020, which was filed with
the SEC on February 19, 2021, and the Current Report on Form 8-K filed with the
SEC on December 2, 2021. These documents may be obtained as indicated above.
Investors and shareholders may obtain more detailed information regarding the
direct and indirect interests of Rogers and its respective directors and
executive officers in the proposed transaction by reading the definitive proxy
statement by reading the definitive proxy statement for the Special Meeting of
Shareholders concerning the proposed merger, which was filed with the SEC on
December 16, 2021.

Safe Harbor Statement

Statements included in this report that are not a description of historical
facts are forward-looking statements. Words or phrases such as "believe," "may,"
"could," "will," "estimate," "continue," "anticipate," "intend," "seek," "plan,"
"expect," "should," "would" or similar expressions are intended to identify
forward-looking statements, and are based on Rogers' current beliefs and
expectations. This report contains forward-looking statements, which concern the
planned acquisition of Rogers by DuPont, our plans, objectives, outlook, goals,
strategies, future events, future net sales or performance, capital
expenditures, future restructuring, plans or intentions relating to expansions,
business trends and other information that is not historical information. All
forward-looking statements are based upon information available to us on the
date of this report and are subject to risks, uncertainties and other factors,
many of which are outside of our control, which could cause actual results to
differ materially from those indicated by the forward-looking statements.
Rogers' actual future results may differ materially from Rogers' current
expectations due to the risks and uncertainties inherent in its business and
risks relating to the Merger. These risks include, but are not limited to:
uncertainties as to the timing and structure of the Merger; the possibility that
various closing conditions for the transaction may not be satisfied or waived,
including that a governmental entity may prohibit, delay or refuse to grant
approval for the consummation of the Merger; the risk that management's time and
attention is diverted on transaction related issues; the risk that Rogers is
unable to retain key personnel; the risk that the business of Rogers may suffer
as a result of potential adverse changes to relationships with employees,
customers, vendors and other business partners; the risk that shareholder
litigation in connection with the Merger may result in significant costs of
defense, indemnification and liability. Other risks and uncertainties that could
cause such results to differ include: the duration and impacts of the novel
coronavirus global pandemic and efforts to contain its transmission and
distribute vaccines, including the effect of these factors on our business,
suppliers, customers, end users and economic conditions generally; failure to
capitalize on, volatility within, or other adverse changes with respect to the
Company's growth drivers, including advanced mobility and advanced connectivity,
such as delays in adoption or implementation of new technologies; uncertain
business, economic and political conditions in the United States (U.S.) and
abroad, particularly in China, South Korea, Germany, Hungary and Belgium, where
we maintain significant manufacturing, sales or administrative operations; the
trade policy dynamics between the U.S. and China reflected in trade agreement
negotiations and the imposition of tariffs and other trade restrictions,
including trade restrictions on Huawei Technologies Co., Ltd. (Huawei);
fluctuations in foreign currency exchange rates; our ability to develop
innovative products and the extent to which our products are incorporated into
end-user products and systems and the extent to which end-user products and
systems incorporating our products achieve commercial success; the ability and
willingness of our sole or limited source suppliers to deliver certain key raw
materials, including commodities, to us in a timely and cost-effective manner;
intense global competition affecting both our existing products and products
currently under development; business interruptions due to catastrophes or other
similar events, such as natural

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disasters, war, terrorism or public health crises; failure to realize, or delays
in the realization of anticipated benefits of acquisitions and divestitures due
to, among other things, the existence of unknown liabilities or difficulty
integrating acquired businesses; our ability to attract and retain management
and skilled technical personnel; our ability to protect our proprietary
technology from infringement by third parties and/or allegations that our
technology infringes third party rights; changes in effective tax rates or tax
laws and regulations in the jurisdictions in which we operate; failure to comply
with financial and restrictive covenants in our credit agreement or restrictions
on our operational and financial flexibility due to such covenants; the outcome
of ongoing and future litigation, including our asbestos-related product
liability litigation; changes in environmental laws and regulations applicable
to our business; and disruptions in, or breaches of, our information technology
systems. Should any risks and uncertainties develop into actual events, these
developments could have a material adverse effect on the Company or the Merger.
For additional information about the risks, uncertainties and other factors that
may affect our business, please see our most recent annual report on Form 10-K
and any subsequent reports filed with the Securities and Exchange Commission,
including quarterly reports on Form 10-Q. Rogers Corporation assumes no
responsibility to update any forward-looking statements contained herein except
as required by law.




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