Announcement: Moody's says Neenah's ratings unchanged by mergerannouncementGlobal Credit Research - 29 Mar 2022New York, March 29, 2022 -- Moody's Investors Service ("Moody's") saidNeenah, Inc. Ba2 corporate family rating, Ba2-PD probability of defaultrating and Ba2 senior secured term loan rating are unchanged followingthe company's announcement on March 28 that it has entered into adefinitive agreement to combine with Schweitzer-Mauduit International,Inc. (SWM) (Ba3, negative) in an all-stock merger of equals. The SGL-2speculative grade liquidity rating is also unchanged.Both companies announced that they intend to refinance Neenah's $450million senior secured term loan due in 2028 in connection with theproposed merger. SWM has entered into a $648 million senior 364-dayunsecured bridge facility with JPMorgan Chase Bank N.A. to facilitaterefinancing. Moody's expects Neenah's debt to be repaid and new debtissued at SWM to facilitate the merger.Moody's will withdraw Neenah's corporate family and instrument ratingsafter the debt is repaid and the transaction closes in the second halfof 2022. The transaction was approved by both companies' boards but isstill subject to the shareholder approval, regulatory approvals andother customary closing conditions.Under the terms of the merger agreement, Neenah shareholders willreceive 1.358 shares of SWM common stock and will own approximately 42percent of the combined company with revenues of approximately $3billion, while Neenah's debt is repaid.The proposed combination is mostly leverage neutral, but has a highintegration risk given that both companies completed transformationaldebt-funded acquisitions in 2021. Both companies also face continued rawmaterial pricing pressures and supply chain disruptions, which may delayexpected earnings growth and deleveraging.Moody's believes that the combined company will benefit from an improvedscale and operational and geographic diversity. The combined companywill benefit from complimentary businesses, especially in the filtrationsegment, which have a higher growth rates and will offset exposure tobusinesses in secular decline (printing and writing paper for Neenah andtobacco products for SWM). The companies also said they expect toachieve at least $65 million in cost synergies in 24-36 months postclose.Based in Alpharetta, Ga., Neenah, Inc. is a manufacturer of fiber-basedtechnical products and fine paper and packaging products. The technicalproducts business accounts for about two-thirds of consolidated salesand manufactures transportation, water and other filtration media aswell as backings for specialty tapes and other specialty markets. Thefine paper and packaging business manufactures premium printing,packaging and other papers. Neenah reported revenues of approximately $1billion for the 12 months ended December 31, 2021.Schweitzer-Mauduit International, Inc. is a producer of specialtymaterials focused on resin-based nets, films and other non-wovensthrough its Advanced Materials & Structures segment and fiber-basedcigarette papers and reconstituted tobacco products through itsEngineered Papers segment. Scapa Group Plc, acquired in April 2021, is amanufacturer of adhesives, coatings and topicals through its healthcarebusiness, and specialty tapes for various end markets in its industrialbusiness. SWM reported sales of $1.4 billion in the twelve months endedDecember 31, 2021.This publication does not announce a credit rating action. For anycredit ratings referenced in this publication, please see the ratingstab on the issuer/entity page on www.moodys.com for the most updatedcredit rating action information and rating history.Anastasija JohnsonVP - Senior Credit OfficerCorporate Finance GroupMoody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007U.S.A.JOURNALISTS: 1 212 553 0376Client Service: 1 212 553 1653Glenn B. EckertAssociate Managing DirectorCorporate Finance GroupJOURNALISTS: 1 212 553 0376Client Service: 1 212 553 1653Releasing Office:Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007U.S.A.JOURNALISTS: 1 212 553 0376Client Service: 1 212 553 1653© 2022 Moody's Corporation, Moody's Investors Service, Inc.,Moody's Analytics, Inc. and/or their licensors and affiliates(collectively, "MOODY'S"). 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