WILMINGTON, Del., Nov. 2, 2021 /PRNewswire/ -- DuPont (NYSE:
DD) today announced a series of actions advancing its strategy as a
premier multi-industrial company focused on market-leading
high-growth, high-margin businesses with complementary technology
and financial characteristics.
DuPont has entered into a definitive agreement to acquire Rogers
Corporation ("Rogers") (NYSE: ROG)(1) for
$5.2 billion. Rogers is a global
leader in engineered materials and components, with unmatched
application engineering expertise and leading positions in markets
where its advanced technology solutions offer competitive
advantages. Its value-added products include high-frequency circuit
materials, ceramic substrates for power semiconductor devices, and
high-performance foams which go into a variety of highly
specialized end-markets where the company has strong, enduring
customer relationships. The transaction is expected to close in the
second quarter of 2022, subject to customary closing conditions,
including approval by Rogers shareholders and receipt of applicable
regulatory approvals.
As part of its ongoing transformation, DuPont also announced
that it intends to divest a substantial portion of its Mobility
& Materials segment(2).
"With today's announcements, we are sharpening our focus on
high-growth, high-value opportunities in sectors with steady
long-term secular growth trends where our global innovation
leadership enables a competitive advantage," said Ed
Breen, Executive Chairman and Chief Executive Officer of
DuPont. "Moving forward, our portfolio will be centered on key
pillars – electronics, water, protection, industrial technologies
and next generation automotive. We are committed to investing in
each of these pillars organically and through strategic
acquisitions to maximize our capabilities in areas that enable our
customers to grow by delivering next generation technologies and
sustainable high value-added solutions. These strategic steps are
expected to create tremendous opportunities for DuPont and Rogers
employees and unlock significant value for shareholders."
By focusing the portfolio on high-growth, high-margin businesses
closely tied to secular growth areas, the combined transactions are
expected to substantially improve DuPont's top-line growth,
operating EBITDA margins and cross-cycle earnings stability,
putting us in line with best-in-class multi-industrial peers.
Acquisition of Rogers Corporation
Rogers designs, develops, manufactures and sells
high-performance and high-reliability engineered materials and
components through its Advanced Electronics Solutions (AES) and
Elastomeric Material Solutions (EMS) segments. Headquartered in
Chandler, Arizona, Rogers has a
workforce of more than 3,500 employees with a global network of 14
manufacturing sites in North
America, Europe, and
Asia and 2021 expected revenues of
approximately $950 million.
Breen continued, "Building on our recent acquisition of Laird
Performance Materials, the acquisition of Rogers further cements
our position as the leading electronic solutions provider in the
industry. We are building an unmatched portfolio that is ideally
positioned to capitalize on rapid demand acceleration in
high-growth markets, including electric vehicles, ADAS, 5G
telecommunications and clean energy. With industry-leading
positions in each of its product categories, a proven history of
application engineering excellence and deep customer relationships,
Rogers is highly complementary to and aligned strategically with
our existing Electronics & Industrial business and is expected
to deliver compelling returns over the near and long-term."
"DuPont is a natural fit for Rogers, as a leading advanced
materials solutions provider," said Bruce D. Hoechner, Rogers' President and
CEO. "DuPont is a proven leader in advanced specialty materials,
and Rogers will benefit from DuPont's global reach and strong
technical and commercial depth. Like DuPont, Rogers' success
is built upon a dedicated team of people committed to excellence
and technology leadership to solve our customers' most complex
application challenges. This combination will create an exciting
next chapter for Rogers' customers, employees and
partners."
DuPont expects to realize approximately $115 million in pre-tax run-rate cost synergies
by the end of 2023. The cost synergies associated with both
the Laird Performance Materials acquisition and the intended Rogers
acquisition represent approximately 6% of the combined revenue,
including DuPont Interconnect Solutions. The estimated one-time
cost to achieve these synergies is approximately $75 million. DuPont expects the deal to be
accretive to its top-line growth, operating EBITDA, free cash flow,
and adjusted EPS upon closing. The enterprise value multiple of the
transaction is approximately 19x estimated fiscal 2022 EBITDA on a
stand-alone basis and approximately 14x including cost
synergies.
DuPont has committed financing in place for the acquisition of
Rogers. DuPont plans on using a portion of the proceeds from the
planned divestiture of a substantial portion of the Mobility &
Materials segment to repay all acquisition financing related to
Rogers and pursue additional growth opportunities in its remaining
key pillars as part of its balanced capital deployment plan.
Intent to Divest Substantial Portion of
Mobility & Materials Segment
DuPont intends to divest a substantial portion of its Mobility
& Materials segment. The Mobility & Materials segment is
comprised of category-defining businesses with longstanding
market-leading positions and differentiated products, technologies
and capabilities to win with customers and outperform competitors.
The businesses within the Mobility & Materials segment that are
in-scope for intended divestiture are predominantly those in the
Engineering Polymers and Performance Resins lines of business as
well as the Company's stake in the DuPont Teijin Films joint
venture. The in-scope product lines include, but are not limited
to, well known and respected brands such as Zytel®, Delrin®,
Hytrel®, Crastin®, Vamac® and TEDLAR®. Combined, these businesses
represent approximately $4.2 billion
in revenue and about $1.0 billion of
operating EBITDA based on full year 2021 estimates.
"Finding an ownership model that appropriately values the
leadership positions and deep customer value proposition of the
in-scope Mobility & Materials portfolio will position the
business for continued success, leveraging its unmatched
combination of products, technologies, and operating expertise for
the benefits of its employees and customers," said Breen. "Through
unprecedented challenges in the past 18 months, these teams have
proven that their unwavering commitment to deliver for their
customers, employees and partners has generated solid results and I
am confident they are well equipped to expand their leadership
positions under new ownership."
Conference Call
The Company will host a live
webcast with investors and analysts to discuss these
announcements beginning today at 8:00 a.m.
ET and extending until about 9:30
a.m. ET in conjunction with its third quarter 2021 earnings
conference call. The slide presentation that accompanies the
conference call will be posted on the DuPont's Investor Relations Events and Presentations page. A replay
of the webcast also will be available on the DuPont's Investor
Relations Events and Presentations page following the
live event.
Advisors – Rogers Corporation Acquisition
Evercore is
serving as DuPont's lead financial advisor, Goldman Sachs & Co.
LLC as a financial advisor and provider of fully committed
financing, and Skadden, Arps, Slate, Meagher & Flom LLP as its
legal counsel.
Advisors – Mobility & Materials Divestiture
Process
Goldman Sachs is serving as DuPont's financial
advisor and Skadden, Arps, Slate, Meagher & Flom LLP as its
legal counsel as we initiate the divestiture process.
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.
About Rogers Corporation
Rogers Corporation
(NYSE: ROG) is a global leader in engineered materials to power,
protect and connect our world. Rogers delivers innovative solutions
to help our customers solve their toughest material challenges.
Rogers' advanced electronic and elastomeric materials are used in
applications for EV/HEV, automotive safety and radar systems,
mobile devices, renewable energy, wireless infrastructure,
energy-efficient motor drives, industrial equipment and more.
Headquartered in Chandler,
Arizona, Rogers operates manufacturing facilities in
the United States, Asia and Europe, with sales offices worldwide.
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.
On April 1, 2019, the Company
completed the separation of the materials science business through
the spin-off of Dow Inc., ("Dow") including Dow's subsidiary The
Dow Chemical Company (the "Dow Distribution"). On June 1, 2019, the Company completed the
separation of the agriculture business through the spin-off of
Corteva, Inc. ("Corteva") including Corteva's subsidiary E. I. du
Pont de Nemours and Company ("EID"), (the "Corteva Distribution"
and together with the Dow Distribution, the "DWDP
Distributions").
On February 1, 2021 the Company
completed the divestiture of the Nutrition & Biosciences
("N&B") business to International Flavors & Fragrance Inc.
("IFF") in a Reverse Morris Trust transaction (the "N&B
Transaction") that resulted in IFF issuing shares to DuPont
stockholders.
On July 1, 2021, DuPont completed
the previously announced acquisition (the "Laird PM Acquisition")
of the Laird Performance Materials business, ("Laird PM").
On November 2, 2021, DuPont
announced it has entered definitive agreements to acquire Rogers
Corporation for cash, (the "Intended Rogers Acquisition"). The
transaction is subject to approval by Rogers' shareholders,
regulatory approvals and customary closing conditions.
On November 2, 2021, DuPont
announced that it has initiated a divestiture process (the
"In-Scope M&M Divestiture Process") related to a substantial
portion of its Mobility & Materials segment, (the "In-Scope
M&M Businesses"). The outcome of which, including the entry
into definitive agreements, is subject to approval of the DuPont
Board of Directors.
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) in connection with
the Intended Rogers Acquisition, the failure to (x) obtain the
necessary approval from Rogers' shareholders, regulatory
approvals, or anticipated tax treatment, or (y) satisfy any
of the other conditions to closing; (ii) the possibility that
unforeseen liabilities, future capital expenditures, revenues,
expenses, earnings, synergies, economic performance, indebtedness,
financial condition, losses, future prospects, business and
management strategies could impact the value, timing or pursuit of
the closing of the Intended Rogers Acquisition; (iii) the timing
and outcome of the In-Scope M&M Divestiture Process and
the risks, costs and ability to realize benefits from the pursuit
of any disposition of the In-Scope M&M Businesses resulting
therefrom; (iv) the ability to achieve expected benefits, synergies
and operating efficiencies in connection with the Laird PM
Acquisition within the expected time frames or at all or to
successfully integrate Laird PM ; (v) ability to achieve
anticipated tax treatments in connection with the N&B
Transaction, Laird PM Acquisition or the DWDP Distributions; (vi)
changes in relevant tax and other laws; (vii) indemnification of
certain legacy liabilities of EID in connection with the Corteva
Distribution; (viii) risks and costs related to the
performance under and impact of the cost sharing arrangement by and
between DuPont, Corteva and The Chemours Company related to future
eligible PFAS costs; (ix) failure to effectively manage
acquisitions, divestitures, alliances, joint ventures and other
portfolio changes, including meeting conditions under the
Letter Agreement entered in connection with the Corteva
Distribution, related to the transfer of certain levels of assets
and businesses; (x) uncertainty as to the long-term value of DuPont
common stock; (xi) risks and uncertainties related to the novel
coronavirus (COVID-19) and the responses thereto (such as voluntary
and in some cases, mandatory quarantines as well as shut downs and
other restrictions on travel and commercial, social and other
activities) on DuPont's business, results of operations, access to
sources of liquidity and financial condition which depend on highly
uncertain and unpredictable future developments, including, but not
limited to, the duration and spread of the COVID-19 outbreak, its
severity, the actions to contain the virus or treat its impact, and
how quickly and to what extent normal economic and operating
conditions resume; and (xii) other risks to DuPont's business,
operations; each as further discussed in detail in and results of
operations as discussed in DuPont's annual report on Form
10-K for the year ended December 31,
2020 and its subsequent reports on Form 10-Q and Form 8-K.
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.
DuPontTM and all products, unless otherwise noted,
denoted with TM, SM or ® are
trademarks, service marks or registered trademarks of affiliates of
DuPont de Nemours, Inc.
(1)
|
On November 2, 2021
DuPont announced it had entered into a definitive agreement to
acquire Rogers Corporation. The transaction is subject to approval
by Rogers Corporation's shareholders, regulatory approvals and
customary closing conditions.
|
|
|
(2)
|
On November 2, 2021
DuPont announced that it has initiated a divestiture process
related to a substantial portion of its Mobility & Materials
segment. The outcome of which, including the entry into definitive
agreements, is subject to approval of the DuPont Board of
Directors. The scope of the intended divestiture excludes certain
product lines including Auto Adhesives and Multibase.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/dupont-announces-strategic-actions-to-enhance-portfolio-for-near-and-long-term-value-creation-301413571.html
SOURCE DuPont