Kaydon Corporation Announces Special Dividend of $10.50 Per Share and Balance Sheet Recapitalization

Kaydon Corporation KDN today announced that, on February 22, 2012, its Board of Directors declared a special cash dividend of $10.50 per share to be paid to shareholders of record as of March 5, 2012 with a payment date of March 26, 2012. The Company will fund the $337 million special dividend through available cash balances and committed bank credit availability. James O'Leary, Chairman and Chief Executive Officer commented, “In an unprecedented and prolonged period of historically low interest rates, this new capital structure and significant return to our shareholders is both the appropriate corporate finance decision and right strategic action for Kaydon. Our long stated goal is to deliver increasing value to our shareholders in the most efficient and effective way possible. This transaction achieves this in a meaningful way, lowering our overall cost of capital without impairing our ability to grow the Company, both organically and through acquisition. “In the last five years, Kaydon's superior cash flow generation has enabled us to repurchase shares of $141 million and pay cash dividends of $105 million while investing $157 million in our existing businesses and funding acquisitions of $94 million, and still have over $225 million of cash at December 31, 2011. Our proven cash generating ability, over an extended period with considerable economic volatility, in aggregate and specific to many of our end markets, supports our confidence in our future cash flow. This special dividend is the result of our ongoing strategic review of capital allocation alternatives available to benefit our shareholders and our confidence in our businesses.