<SEC-DOCUMENT>0001193125-17-358767.txt : 20180104
<SEC-HEADER>0001193125-17-358767.hdr.sgml : 20180104
<ACCEPTANCE-DATETIME>20171201145603
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-17-358767
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20171201

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			RPM INTERNATIONAL INC/DE/
		CENTRAL INDEX KEY:			0000110621
		STANDARD INDUSTRIAL CLASSIFICATION:	PAINTS, VARNISHES, LACQUERS, ENAMELS & ALLIED PRODUCTS [2851]
		IRS NUMBER:				020642224
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0531

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		2628 PEARL RD
		STREET 2:		P O BOX 777
		CITY:			MEDINA
		STATE:			OH
		ZIP:			44258
		BUSINESS PHONE:		3302735090

	MAIL ADDRESS:	
		STREET 1:		2628 PEARL RD
		STREET 2:		P O BOX 777
		CITY:			MEDINA
		STATE:			OH
		ZIP:			44258

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	RPM INTERNATIONAL INC/OH/
		DATE OF NAME CHANGE:	20021015

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	RPM INC/OH/
		DATE OF NAME CHANGE:	19920703

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	REPUBLIC POWDERED METALS INC
		DATE OF NAME CHANGE:	19711027
</SEC-HEADER>
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<TYPE>CORRESP
<SEQUENCE>1
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">[Calfee, Halter&nbsp;&amp; Griswold LLP Letterhead] </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">December&nbsp;1, 2017 </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>VIA EDGAR </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Corporation
Finance </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">100 F Street, N.E. </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, D.C. 20549 </P>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">Attention:</P></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">&nbsp;Mr.&nbsp;Terence O&#146;Brien</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">&nbsp;Accounting Branch Chief</P> <P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman">&nbsp;Office of Manufacturing and
Construction</P></TD></TR>
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<TD WIDTH="5%" VALIGN="top" ALIGN="left"><B>Re:</B></TD>
<TD ALIGN="left" VALIGN="top"><B>RPM International Inc. </B></TD></TR></TABLE> <P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:13%; font-size:10pt; font-family:Times New Roman"><B>Form <FONT STYLE="white-space:nowrap">10-K</FONT> for the
Year Ended May&nbsp;31, 2017 </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:13%; font-size:10pt; font-family:Times New Roman"><B>Filed July&nbsp;24, 2017 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:13%; font-size:10pt; font-family:Times New Roman"><B>Response letter dated October&nbsp;16, 2017 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:13%; font-size:10pt; font-family:Times New Roman"><B>File <FONT STYLE="white-space:nowrap">No.&nbsp;1-14187</FONT> </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Dear Mr.&nbsp;O&#146;Brien: </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">RPM International
Inc. (the &#147;Company&#148; or &#147;RPM International&#148;) is hereby providing the following supplemental information in response to the correspondence received from the Division of Corporation Finance, dated November&nbsp;6, 2017. In addition,
the Company has authorized us to confirm on its behalf the following matters that were discussed on a conference call with members of the staff of the Division of Corporation Finance and the Office of the Chief Accountant (the &#147;Staff&#148;) on
November&nbsp;29, 2017. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">1.&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Corporate History and Name Changes of Relevant Entities</U></B> <B>&#151;</B> The original
corporate name of Specialty Products Holding Corp. (&#147;SPHC&#148;) was Republic Powdered Metals, Inc., which was incorporated in Ohio in 1947. In 1972, Republic Powdered Metals, Inc. changed its name to RPM, Inc. and created two subsidiaries for
its two businesses. The two new subsidiaries were named Republic Powdered Metals, Inc. (&#147;Republic&#148;), which engaged in the roofing business, and Bondex International, Inc. (&#147;Bondex&#148;), which had an asbestos-containing joint
compound as one of its products. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">In 2002, RPM, Inc. became a subsidiary of a newly-formed Delaware corporation named RPM International in
a reincorporation transaction. RPM, Inc.&#146;s name was changed to SPHC in 2010 prior to filing for bankruptcy protection to avoid confusion with RPM International. </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">December 1, 2017 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> Page
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">2.&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Asbestos Liability of RPM International and
<FONT STYLE="white-space:nowrap">Non-Bankrupt</FONT> Subsidiaries</U></B> <B>&#151; </B>The Company maintained prior to and during the bankruptcy process that it and its <FONT STYLE="white-space:nowrap">non-bankrupt</FONT> subsidiaries were not
liable for the asbestos-related claims asserted against Bondex and SPHC.&nbsp;&nbsp;&nbsp;&nbsp;In that regard, RPM International was incorporated in 2002, and was not in existence when the Bondex or SPHC asbestos-containing products were
manufactured nor when the alleged exposures to those products occurred. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">From time to time, RPM International was named as a defendant in
certain Bondex/SPHC cases. However, those cases represented a very small percentage of the overall litigation involving Bondex/SPHC. In that regard, from 2000 until the bankruptcy filing in 2010, Bondex/SPHC settled approximately 27,000 asbestos
claims, and was a defendant in approximately 15,000 pending asbestos suits at the time of the bankruptcy filing. RPM International was named in approximately 2% of those settled and pending Bondex/SPHC cases. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company believes that RPM International was named as a defendant in some cases due to confusion between its name and the name of the
&#147;RPM, Inc.&#148; entity that became SPHC. In other situations, RPM International was specifically named as a defendant based upon allegations that it was liable as an &#147;alter ego&#148; of SPHC. Despite being named in these cases, RPM
International has authorized us to advise the Staff that it never had a judgment entered against it, and was typically dismissed prior to trial or if still in the case at trial, typically obtained a directed verdict. Further, RPM International was
not under any obligation to reacquire SPHC. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">3.<B>&nbsp;&nbsp;&nbsp;&nbsp;</B><B><U>Amounts Paid in Settlement for NMBFil, Inc. (&#147;NMBFiL&#148;) and
Republic</U></B><B> &#151; </B>As RPM International&#146;s management discussed with the Staff on November&nbsp;29, 2017, asbestos claims against Republic were included in the Bondex/SPHC trust, but there was no amount specifically allocated to
those claims. Like RPM International, the Company believes that Republic was named in some of the Bondex/SPHC cases primarily due to name confusion. From 2005 until 2014, Republic was named in approximately 140 cases a year compared to over 1,000
for Bondex/SPHC. Since 2005, Republic had not settled any claims, and many claims were dismissed without payment. No judgment was ever entered against Republic. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">NMBFiL made body filler, and the assets of that business were sold in 2007. However, NMBFiL retained its liabilities and began receiving about
five lawsuits per year based on the theory that the talc in its product was contaminated with asbestos. NMBFiL was never found liable and never settled a case. NMBFiL&#146;s asbestos litigation was completely separate from the Bondex/SPHC asbestos
claims and as a result a separate trust funded with $2.5&nbsp;million was established for the NMBFiL claims. That $2.5&nbsp;million was part of the original $450&nbsp;million payment. This $2.5&nbsp;million payment was classified as operating cash
outflow on RPM International&#146;s fiscal year 2015 statement of cash flows as it was deemed a settlement of an operating liability of NMBFiL, a consolidated subsidiary of RPM International. </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">December 1, 2017 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> Page
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">4.&nbsp;&nbsp;&nbsp;&nbsp; <B><U>Application of ASC <FONT STYLE="white-space:nowrap"><FONT
STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">805-30-30-7</FONT></FONT></FONT></U></B> <B>&#151; </B>RPM International had no guarantees for any of the asbestos obligations or claims. Further, while RPM International had been named in
a very small portion of the lawsuits, and there had been mere allegations made of alter ego liability, those allegations had never resulted in a finding of liability in the form of a judgment against the Company. Accordingly, the Company determined
that there was not a settlement of a <FONT STYLE="white-space:nowrap">pre-existing</FONT> liability pursuant to ASC <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">805-30-30-7,</FONT></FONT></FONT>
but rather the payment was to obtain a controlling financial interest in SPHC. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">In assessing the accounting to be applied to this
transaction, the Company considered this to be a business combination under ASC 805 as the Company obtained a controlling financial interest in the underlying business. RPM International was making an acquisition decision based upon the fair value
derived from the future cash flows of the underlying businesses. Accordingly, RPM International&#146;s decision to regain control of SPHC out of bankruptcy was based on a determination that the consideration transferred represented a reasonable
purchase price for the net assets acquired. In assessing the substance of the payments, the Company considered the definition of &#147;consideration transferred&#148; found in ASC <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT
STYLE="white-space:nowrap">805-30-30-7,</FONT></FONT></FONT> specifically inclusion of the reference to &#147;&#133;liabilities incurred by the acquirer <U>to former owners of the acquiree</U>.&#148; The Company noted that in the bankruptcy process,
since SPHC was effectively insolvent, the debtors including the asbestos claimants were essentially the owners of the businesses. Accordingly, the 524(g) trust represents the impaired creditors who in substance &#147;owned&#148; the businesses
because they were entitled to all of the risks and rewards of the businesses while in bankruptcy (the only impaired classes of debtors in the bankruptcy were the asbestos claimants). Additionally, RPM International wrote off its investment in SPHC
in the period ending May&nbsp;31, 2010, and did not recognize any further benefit from SPHC subsequent to the bankruptcy filing. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">5.&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Valuation of SPHC</U></B> &#151; RPM International engaged a third-party investment bank to perform an independent valuation
on a &#147;controlling basis&#148; of SPHC and its 21.4% minority interest of RPM Holdco Corp. (an intermediate holding company between RPM International and it&#146;s foreign operating subsidiaries).&nbsp;The investment bank utilized customary
valuation techniques to value an operating business or group of businesses. The valuation was based upon then current and projected EBITDA utilizing an average of several different valuation scenarios including: current market multiples; long-term
market multiples; and transaction multiples of the underlying cash flows of the businesses owned by SPHC to determine a range of values on a controlling basis.&nbsp;The valuation indicated a range of values of approximately $770&nbsp;million to
$860&nbsp;million.&nbsp;The total consideration transferred to the 524(g) trust was $798&nbsp;million with a net present value of $773&nbsp;million, which was within the valuation&#146;s range. </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">December 1, 2017 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> Page
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Should you require further information or if there are any questions concerning the
information set forth above, please do not hesitate to contact me ((216) <FONT STYLE="white-space:nowrap">622-8507;</FONT> jjenkins@calfee.com) or, in my absence, Gregory S. Harvey ((216) <FONT STYLE="white-space:nowrap">622-8253;</FONT>
gharvey@calfee.com). </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><DIV ALIGN="right">
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<TD VALIGN="top">Very truly yours,</TD></TR>
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<TD VALIGN="top">/s/ John J. Jenkins</TD></TR>
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<TD VALIGN="top">John J. Jenkins</TD></TR>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">cc:</TD>
<TD ALIGN="left" VALIGN="top">Russell L. Gordon </TD></TR></TABLE> <P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Edward W. Moore </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Thomas F. McKee </P>
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