DuPont Announces Agreement to Divest ~80% Ownership in Delrin® Business to TJC

Rhea-AI Summary

DuPont announces sale of 80.1% ownership interest in Delrin business to TJC LP for $1.8 billion

Positive

• Transaction valued at $1.8 billion
• DuPont to receive $1.25 billion in cash proceeds at close

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• None.

WILMINGTON, Del., Aug. 21, 2023 /PRNewswire/ -- DuPont (NYSE: DD) today announced a definitive agreement to sell an 80.1% ownership interest in the Delrin^® acetal homopolymer (H-POM) business¹ to TJC LP (TJC) in a transaction valuing the business at $1.8 billion.

TJC has received fully committed financing in connection with the transaction, which is expected to close around year-end 2023, subject to customary closing conditions and regulatory approval.

At close, DuPont will receive pre-tax cash proceeds of approximately $1.25 billion, subject to customary transaction adjustments, a note receivable of $350 million, and will own a 19.9% non-controlling common equity interest in the Delrin business.

"Today's announcement largely completes our planned exit of the former M&M segment, advancing our position as a premier multi-industrial company," said Ed Breen, DuPont Executive Chairman and Chief Executive Officer. "This transaction is structured to maximize value for our shareholders, providing significant cash proceeds at close to be deployed in line with our strategic priorities while providing an opportunity for DuPont to participate in future upside potential upon exit of our retained equity interest in the Delrin business."

"We are excited to partner with TJC given their successful track record of creating value through an operations-focused approach and are confident in their ability to drive growth and opportunity for employees and customers of the Delrin business," Breen continued.

"Delrin is widely recognized as the material of choice for safety critical and high cost-of-failure applications across diverse end markets," said Ian Arons, TJC Partner. "For over 60 years the Delrin business has leveraged its differentiated technologies and global manufacturing presence to provide its customers high quality, innovative solutions. We are thrilled to have DuPont as a partner, and we look forward to working closely with the entire Delrin team to drive future growth in the business." 

The results of operations of the Delrin business will continue to be presented as discontinued operations in DuPont's consolidated financial statements through transaction closing.

Goldman Sachs & Co. LLC is serving as DuPont's financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel. Citi is acting as financial advisor and Kirkland & Ellis LLP are serving as legal counsel to TJC.

¹ Appropriate works council information and consultation processes are underway in connection with the transaction. As is customary in connection with certain works council requirements in the Netherlands, TJC has agreed to buy the Delrin® business in the Netherlands if DuPont exercises a put option under the definitive agreements after completing the required works council consultation process.

About TJC
TJC (formerly known as The Jordan Company), founded in 1982, is a middle-market private equity firm that has raised funds with original capital commitments in excess of $22 billion and a 41-year track record of investing in and contributing to the growth of many businesses across a wide range of industries including Diversified Industrials; Technology, Telecom & Power; Logistics & Supply Chain and Consumer & Healthcare. The senior investment team has been investing together for over 20 years and is supported by the Operations Management Group, which was established in 1988 to initiate and support operational improvements in portfolio companies. TJC has offices in New York, Miami, Chicago and Stamford. For more information, visit www.tjclp.com.

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)  risks and uncertainties related to the settlement agreement concerning PFAS liabilities reached June 2023 with plaintiff water utilities by Chemours, Corteva, EIDP and DuPont, including timing of court approval and the level of opt-outs  from the settlement (iii) 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, including the outcome of any pending or future litigation related to PFAS or PFOA, including personal injury claims and natural resource damages claims; the extent and cost of ongoing remediation obligations and potential future remediation obligations; changes in laws and regulations applicable to PFAS chemicals; (iv) 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; (v) indemnification of certain legacy liabilities;  (vi) 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; (vii) 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; (viii) ability to offset increases in cost of inputs, including raw materials, energy and logistics; (ix) 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; (x) 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 (xi) 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