RPMGlobal Holdings Limited (RUL.AX) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. As the time is 10 a.m. here in Brisbane, on behalf of the RPM Board, I'm pleased to welcome everyone here in person today, and those joining us online to the Scheme Meeting of RPMGlobal Holdings Limited. My name is Stephen Baldwin, and I'm Chair of the Board of RPM. As we have a quorum, I now declare the meeting open. This Scheme Meeting has been convened by an order of the Federal Court of Australia made on 17 November 2025, pursuant to Clause 411(1) of the Corporations Act. The sole item of business for today's meeting is consideration of the proposed acquisition of RPM by Revolution HoldCo Pty Ltd, an entity ultimately owned by Caterpillar, by way of the scheme of arrangement at $5 per RPM share. Before we get started with formal proceedings, I would just go through a few administrative items. In the unlikely event of an emergency, representatives from Baker McKenzie will assist us to evacuate the meeting room in accordance with the required process. Bathrooms are up in the corridor near the lifts. Today's meeting is being held as a hybrid meeting, both in person here at the offices of Baker McKenzie in Brisbane. And also via the Computershare platform. For the shareholders joining us online, you may participate via the online platform from your computer, your smartphone or your tablet by entering the URL detailed in the Notice of Meeting into your browser. This online platform allows you to view the meeting presentation, to vote, and to ask questions in real time. For the shareholders joining us online, to ask a question, please select the Q&A icon, select the topic your question relates to, and type your question into the chatbox at the bottom of the screen and then press send. Questions can be submitted at any time. However, please note that while you can submit questions from now on, I will not address them until the appropriate time in the meeting. Please also note that your questions may be moderated or if we receive multiple questions on 1 topic, amalgamated together. Shareholders online can ask an audio question by following the instruction below the webcast window. A reminder on how to vote will be displayed in the presentation when we reach the formal business part of this meeting. For shareholders joining us in person today, we will welcome any questions you have in relation to the Scheme. Your participation is valued. By keeping questions respectful and relevant, we ensure that everyone has the chance to be heard and that the meeting runs smoothly. When asking a question, we would respectfully request that you please stand, if you're able, or alternatively raise your hand. Begin by stating your name and whether you're attending as a shareholder or as a proxy, and please keep your question clear and concise, focusing on the Scheme resolution at hand. Once you've asked your question, 1 of the RPM team will respond to it. With those administrative matters addressed, I want to formally welcome you to the RPM Scheme Meeting, which has been called under the Notice of Meeting issued on 17 November 2025, and I propose that the Notice of Meeting be taken as read. Here with me today are my fellow directors, consisting of Chief Executive Officer and Managing Director, Richard Mathews.

Good morning.

RPM Non-Executive Director, Paul Scurrah.

Good morning.

RPM Non-Executive Director, Angeleen Jenkins.

Good morning all.

And RPM Non-Executive Director, Ross Walker.

Good morning, everyone.

A number of the RPM management team in attendance today, including key management personnel, James O'Neill, RPM's Group General Counsel and Company Secretary; and Michael Kochanowski, RPM's Chief Financial Officer.

Good morning.

Good morning.

With those introductions completed, I will now proceed with the formal part of the meeting. Voting today will be conducted by way of a poll on the sole item of business. For shareholders joining us in person, as voting at this meeting will be conducted by way of a poll, each member, present in person or by proxy, has 1 vote for every share held. Eligible shareholders and proxy holders have been issued with a blue voting card. If you've not received a voting card, please see a member of the Computershare team now. On your voting card, you will see the resolution listed. Please mark your choice clearly by either ticking for, against or abstain. Please ensure you print your name where indicated on the voting card. A member of the Computershare team will circulate a ballot box at the relevant time in the meeting. And the returning officer will tabulate the votes once the poll is closed. The results will then be announced to the ASX as soon as practical after the conclusion of this meeting. For those shareholders joining us online, if you are eligible to vote at this meeting, a new voting icon will appear. Selecting this icon will bring up a list of resolutions and present you with voting options. To cast your vote, simply select 1 of the options. A tick will appear to confirm receipt of your vote. You do however have the ability to change your vote up until the time I declare voting closed. The voting icon will soon appear. Please submit your votes at any time. I will give you a warning before I move to close voting towards the conclusion of today's meeting. I now declare the poll open for all shareholders, both in person and online. The poll will remain open until the conclusion of the meeting, and I will provide members with notice of when the poll is about to close, so that all members have the opportunity to cast their votes. Turning to the Scheme Resolution. The sole item of business today is to consider, and if thought fit, to agree to the scheme of arrangement with or without amendments or any alterations or conditions required by the Court, to which RPM and Caterpillar agree, that's proposed to be made between RPM and RPM shareholders, referred to as the Scheme. A copy of the scheme and a copy of the explanatory statement required by Section 412 of the Corporations Act in relation to the Scheme are contained in the scheme booklet, which has been available here, distributed to shareholders attached with the Notice of Scheme Meeting on 17 November 2025. Shareholders have been asked to consider, and if thought fit, pass the following resolution, which is set out in the Notice of Meeting. I will now read out to this resolution, that pursuant to in accordance with the provisions of Section 411 of the Corporations Act, the scheme of arrangement proposed between RPMGlobal Holdings Limited and the holders of its ordinary shares other than an excluded shareholder, as contained in and more particularly described in the scheme booklet, for which the notice convening the scheme meeting forms part has agreed to with or without amendment or any alterations or conditions as approved by the Federal Court of Australia, which RPMGlobal Holdings Limited and Caterpillar Inc. agree. Proxies that have been submitted before the meeting are being shown on the slide now. All open proxies given to the Chairman will be voted by me in favor of the scheme. Your directors recommend you vote in favor of this resolution. As there has been no superior proposal and the independent expert has continued to conclude that the scheme is in the best interest of RPM shareholders, all RPM directors unanimously recommend that you vote in favor of the Scheme. And all available proxies will be voted in favor of this resolution. Subject to those same qualifications, each of the RPM Directors intend to vote all RPM shares, which they own or control in favor of the Scheme. Further information regarding the RPM Director's recommendation included the interest of RPM Directors, are set out in Sections 1.3 and 9.1 of the scheme booklet. For the sake of absolute clarity, I confirm that RPM has not received a superior proposal. And the independent expert has continued to conclude that the scheme is in the best interest of RPM shareholders. The RPM Directors considered the scheme provides an opportunity for RPM shareholders to realize the immediate and certain value for their RPM shares at an attractive price. The reasons why shareholders may vote for or against the resolution are set out in detail in the scheme booklet. However, as mentioned, the RPM directors consider that the advantages to RPM shareholders of the scheme proceeding outweigh the disadvantages. Having regard to the significant premium and the certainty of value and cash proceeds, contrast it against the future risks and uncertainties associated with the RPM business if the scheme does not proceed. With the proposed scheme to be binding in accordance with Section 411(4)(a) of the Corporations Act, the Scheme resolution must be passed by unless the Court orders otherwise, a majority in number, more than 50% of RPM shareholders other than an excluded shareholder present and voting either in person or online or by proxy, attorney or in the case of corporate RPM shareholders by body corporate representative at the Scheme Meeting. And also, at least 75% of the votes cast on the scheme resolution at the meeting plus RPM shareholders other than an excluded shareholder, present and voting, either in person or online or by proxy, attorney or in the case of corporate RPM shareholders by body corporate representatives. As can be evidenced by the proxies received prior to today's meeting, there's overwhelming support from our shareholders. I note that following the shareholder vote in accordance with Section 411(4)(b) of the Corporations Act, to become effective, the scheme must be approved by the Court. And all other conditions precedent must be satisfied or waived, if capable of waiver. The conditions precedent include regulatory approvals by the Foreign Investment Review Board, the FIRB, and the Australian Competition and Consumer Commission, the ACCC. Further information about the conditions precedent to the Scheme becoming effective are set out in the scheme booklet. I wanted today to take the opportunity to provide an update on the status of the regulatory approvals. FIRB have requested an extension through to 15 January 2026, to review and approve the application. The monetary value of the transaction requires approval from the Treasurer under the current FIRB monetary threshold rules and the FIRB's request for additional time reflects the expected time to obtain that approval with the Christmas disclosure period. With respect to the ACCC, as per the announcement that was made to the ASX yesterday afternoon, 18 December, the ACCC has provided clearance through their written determination that the ACCC will not oppose a transaction. Accordingly, if the scheme resolution is passed by the requisite majorities at today's shareholder meeting, completion will remain subject to FIRB approval being obtained as well as final approval by the Court. The company will make an announcement to the ASX platform to update shareholders further in respect of the FIRB approval once that approval progresses. If the scheme resolution is passed by the requisite majorities and the other conditions of the scheme other than approval by the Court are satisfied or waived, we're capable of waiver. By the time required under the Scheme, RPM will then apply to the Court for the necessary orders to give effect to the scheme. And in order for the scheme to become effective and must be approved by the Court, and an office copy of the orders of the Court approving the scheme has to be lodged with ASIC. The timetable for those events are set out in the scheme booklet and have all proceeds as planned, the implementation date for the scheme is expected to be 18 February 2026. The Board will now be happy to take any comments or questions you may have in relation to the Scheme. Firstly, does anyone in the room with us here today have any questions they would like to ask?

James, are there any questions online that you've received relating to the Scheme?

There are a couple, Steve, which I'll work through an order now. The first question relates to the ACCC approval. The question was, why did it take the ACCC until yesterday evening to grant its approval for the deal? Was there a risk that the Scheme Meeting today was going to have to be delayed and which areas of market power where the ACCC most concerned about? The question asked, is the company aware of any customers who are concerned with the market power that Caterpillar will have once the takeover is completed?

[indiscernible]

So the ACCC approval came through yesterday within the required time frame that the ACCC has to consider the matter. It's a regulatory time frame. There's nothing that was of concern to the ACCC in terms of why that came through last night. We're obviously appreciative that it came through in time for the Scheme Meeting, but there was never a risk that the ACCC approval would have delayed today's meeting. If it was indeed not received last night, it would have come through after today's meeting and we would have made the necessary disclosure as we did with FIRB. The reasons for the ACCC's review are actually set out in their response. It's available publicly on the website. So I'll refer the shareholder to that -- for their questions as to the areas the ACCC were concerned about. In terms of the point about customers who are concerned with the concentrated market power, that's something the ACCC looks at. Again, I'd refer the shareholder to that reasoning that's been made available by the ACCC.

Thank you, James. Was there another question?

There was. Thank you for disclosing the proxy votes early to the ASX along with the formal addresses. The question was, why is only the share metrics disclosed and not the number in terms of the headcount? Was there a material opposition in terms of headcount? Is the 50% support requirement likely to be comfortably achieved? And what sort of campaign did the company run to get the vote out amongst retail shareholders?

If you may...

So the number of shareholders that voted by proxy is clearly disclosed on the screen in front of shareholders now, 854. Obviously, the headcount test is a combination of proxies before meeting as well as those in attendance physically and online. So the actual headcount test is only available to be disclosed post meeting. Fair to say, based on the proxies, we had less than 3% of number of shareholders vote against the resolution. So we're pretty safe on the 50% based on the proxies received. The company ran a campaign using Georgeson to assist with making sure that shareholders were aware that the Scheme Meeting was on. There was also a telephone number that shareholders could contact if they had any questions during the period.

Thanks, James.

Third question. Historically, the company hasn't published a direct link to the webcast for AGMs on its website. The request was could that occur post meeting for the Scheme for those who weren't able to turn in live? And are we even recording the meeting? Yes, the meeting is being recorded and no problems providing access via the website. And last 2 questions are actually 2 different holders, Steve, but they are linked. That's based on the intentions of Caterpillar post completion relating to employees predominantly. So the questions in a linked way are, has Caterpillar expressed intentions regarding the structure of the business post-acquisition? Will RPM remain as independent post-acquisition? And are there any concerns relating to job losses, including in respect of head office functions post-completion?

Richard, do you -- maybe want to answer that?

I don't want to speak on behalf of Caterpillar. But the indications, the discussions I've had with them is that they would keep us as an independent company. They're very keen on the voice of the customer. We have a very strong focus on the customer as they do. And there's no expectations of job losses at all. They're very keen to keep all of the staff. They value our staff and they have, I guess, cultures and values are very, very similar to ours. I think they're a great acquirer for the business, both in terms of the employees and the products going forward. So...

And that was the last question on the portal.

Thank you, James. Okay. As there are no further questions, I move that the scheme resolution now be put to shareholders for voting. I will shortly close the voting system to allow the company's share registry to finish tallying the votes and the proxies. I will pause and provide all shareholders online with approximately 30 seconds to finalize their voting. And a member of Computershare will now collect the voting cards here in the room. [Voting]

Thank you. I think 30 seconds have passed and the Computershare representative has collected all the voting cards here in the room. I now declare voting closed. Before I move to close the voting, shareholders are invited to ask any further questions via the platform or to raise any other business which may lawfully be brought before the meeting. James, are there any other questions online?

No, Steve.

No other questions in the room. Okay. Well, there being no further questions, I confirm that concludes our discussion on the Scheme Resolution. The final confirmation of the results of all votes of today's meeting, together with the proxies already received, will be released to the stock exchange later today, after being audited by RPM share register -- to representatives at Computershare. Before formally closing in, I'd like to thank our shareholders, both in the room and online for supporting the company and for all your support of the Board and the management team over the years. Thank you all for your attendance and your interest. There being no further business, I now declare the Scheme Meeting closed, subject to finalization of the poll. Thank you.