- Complements existing offerings for biopharma and pharma
processing, medical devices and packaging, including DuPont's
Liveo™ silicone solutions and Tyvek®
Medical Packaging.
- Strengthens DuPont's position in fast-growing, low
cyclicality healthcare markets. Following the acquisition,
approximately 10% of DuPont's consolidated revenue will come from
healthcare.
- Adds best-in-class advanced manufacturing capabilities and
multi-decade customer relationships with the world's largest
medical device OEMs.
- Purchase price of $1.75
billion, $1.72 billion net
purchase price after tax attributes, subject to customary
transaction adjustments.
- 15.6x multiple on 2023 forecast EBITDA based on net purchase
price, 13.2x including expected cost synergies of ~$20 million.
- DuPont expects the deal to be immediately accretive to its
adjusted EPS and to achieve high single-digit ROIC by year
five.
WILMINGTON, Del., May 2, 2023
/PRNewswire/ -- DuPont (NYSE: DD) today announced that it has
entered into a definitive agreement to acquire Spectrum Plastics
Group ("Spectrum") from AEA Investors. The purchase price will be
paid from existing cash balances. The transaction is expected to
close by the end of the third quarter of 2023, subject to
regulatory approvals and other customary closing
conditions.
Spectrum is a recognized leader in advanced manufacturing of
specialty medical devices and components, serving 22 of the top 26
medical device OEMs with a strategic focus on key fast-growing
therapeutic areas such as structural heart, electrophysiology,
surgical robotics and cardiovascular.
Spectrum has more than 2,200 employees and has delivered
consistent high single-digit growth rates for many years. With its
strong financial performance, advanced manufacturing expertise, and
customer-centric orientation, Spectrum is fully aligned with
DuPont's strategic objective of delivering innovative specialized
materials and solutions into attractive end markets with long-term
secular growth trends.
"We have been focused on Spectrum for a long time and our team
is extremely excited for this opportunity," said Ed Breen, Executive Chairman and Chief Executive
Officer of DuPont. "Spectrum is a compelling strategic complement
to our existing healthcare portfolio, which already includes
businesses with best-in-class innovation, deep customer
relationships and with strong growth and profitability. With this
combination, we'll be able to offer customers additional innovation
and manufacturing capabilities with a broader and more integrated
solution set."
"Spectrum is a best-in-class company for the development and
advanced manufacturing of specialty medical devices and
components," said Rahul Goyal, a
Partner at AEA Investors. "Through investments in the commercial
and engineering organizations and expansion of its manufacturing
operations, Spectrum has enhanced its capabilities and offerings in
medical end markets and achieved significant growth and increased
profitability. We are proud to have supported Spectrum's
transformation for the past five years and believe DuPont is an
excellent partner for Spectrum. The combination is ideally
positioned to continue providing excellent customer service and
highly-engineered solutions for critical healthcare
applications."
Additional information is available in a supplemental deck
posted on the Events & Presentations page on DuPont's Investor
Relations website.
Advisors
Skadden, Arps, Slate, Meagher & Flom LLP served as legal
advisor to DuPont. Fried, Frank, Harris, Shriver &
Jacobson LLP served as legal advisor and Piper Sandler Companies
served as financial advisor to Spectrum and AEA Investors.
About AEA
AEA Investors LP was founded in 1968 by the
Rockefeller, Mellon and Harriman family interests and S.G. Warburg
& Co. as a private investment vehicle for a select group of
industrial family offices with substantial assets. AEA has an
extraordinary global network built over many years which includes
leading industrial families, business executives and leaders; many
of whom invest with AEA as active individual investors and/or join
its portfolio company boards or act in other advisory roles. Today,
AEA's approximately 110 investment professionals operate globally
with offices in New York,
Stamford, San Francisco,
London, Munich and Shanghai. The firm manages funds that have
approximately $19 billion of invested
and committed capital including the leveraged buyouts of middle
market companies and small business companies, growth capital and
mezzanine and senior debt investments.
About DuPont
DuPont (NYSE: DD) is a global innovation leader with
technology-based materials and solutions that help transform
industries and everyday life. Our employees apply diverse science
and expertise to help customers advance their best ideas and
deliver essential innovations in key markets including electronics,
transportation, construction, water, healthcare and worker safety.
More information about the company, its businesses and solutions
can be found at www.dupont.com. Investors can access information
included on the Investor Relations section of the website at
investors.dupont.com.
DuPont™, the DuPont Oval Logo, and all trademarks and service
marks denoted with ™, SM or ® are
owned by affiliates of DuPont de Nemours, Inc. unless otherwise
noted.
Cautionary Statement Regarding Forward Looking
Statements
This communication contains "forward-looking
statements" within the meaning of the federal securities laws,
including Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
In this context, forward-looking statements often address expected
future business and financial performance and financial condition,
and often contain words such as "expect," "anticipate," "intend,"
"plan," "believe," "seek," "see," "will," "would," "target," and
similar expressions and variations or negatives of these words.
Forward-looking statements address matters that are, to varying
degrees, uncertain and subject to risks, uncertainties, and
assumptions, many of which that are beyond DuPont's control, that
could cause actual results to differ materially from those
expressed in any forward-looking statements. Forward-looking
statements are not guarantees of future results. Some of the
important factors that could cause DuPont's actual results to
differ materially from those projected in any such forward-looking
statements include, but are not limited to: (i) the
possibility that the Company may fail to realize the anticipated
benefits of the $5 billion
share repurchase program announced on November 8, 2022 and that the program may be
suspended, discontinued or not completed prior to its termination
on June 30, 2024; (ii) ability to
achieve anticipated tax treatments in connection with mergers,
acquisitions, divestitures and other portfolio changes actions and
impact of changes in relevant tax and other laws; (iii)
indemnification of certain legacy liabilities; (iv) risks and costs
related to each of the parties respective performance under and the
impact of the arrangement to share future eligible PFAS costs by
and between DuPont, Corteva and Chemours; (v) failure to timely
close on anticipated terms (or at all), realize expected benefits
and effectively manage and achieve anticipated synergies and
operational efficiencies in connection with mergers, acquisitions,
divestitures and other portfolio changes, including the acquisition
of Spectrum; (vi) risks and uncertainties, including increased
costs and the ability to obtain raw materials and meet
customer needs, related to operational and supply chain impacts or
disruptions, which may result from, among other events, pandemics
and responsive actions; timing and recovery from demand declines in
consumer-facing markets, including in China; and geo-political and weather related
events; (vii) ability to offset increases in cost of inputs,
including raw materials, energy and logistics; (viii) risks from
continuing or expanding trade disputes or restrictions, including
on exports to China of
U.S.-regulated products and technology impacting the semiconductor
business; (ix) risks, including ability to achieve, and costs
associated with DuPont's sustainability strategy including the
actual conduct of the company's activities and results thereof, and
the development, implementation, achievement or continuation of any
goal, program, policy or initiative discussed or expected; and (x)
other risks to DuPont's business, operations; each as further
discussed in DuPont's most recent annual report and subsequent
current and periodic reports filed with the U.S. Securities and
Exchange Commission. Unlisted factors may present significant
additional obstacles to the realization of forward-looking
statements. Consequences of material differences in results as
compared with those anticipated in the forward-looking statements
could include, among other things, business or supply chain
disruption, operational problems, financial loss, legal liability
to third parties and similar risks, any of which could have a
material adverse effect on DuPont's consolidated financial
condition, results of operations, credit rating or liquidity. You
should not place undue reliance on forward-looking statements,
which speak only as of the date they are made. DuPont assumes no
obligation to publicly provide revisions or updates to any
forward-looking statements whether as a result of new information,
future developments or otherwise, should circumstances change,
except as otherwise required by securities and other applicable
laws.
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SOURCE DuPont