DuPont has reached a $1.25 billion deal with private equity firm TJC for a majority stake in its Delrin business line. | DBT PHOTO BY JACOB OWENS
WILMINGTON – After more than a year of fielding offers, DuPont announced Monday morning that it has reached a sale agreement for its Delrin product line with TJC, a private equity firm formerly known as The Jordan Company.
DuPont will retain an interest in the plastic-like product that is used for high-load mechanical applications such as gears, safety restraints, door systems, conveyor belts, health care delivery devices, and more, selling 80.1% of the ownership interest to TJC in a deal that values the line at $1.8 billion.
The sale of the majority stake in its Delrin line is the last transaction teased by the Wilmington-headquartered DuPont since it reorganized and refocused the advanced materials company toward electric vehicles, 5G telecommunications and clean energy. It completed the $11 billion sale of the majority of its Mobility & Materials (M&M) business in November to Celanese Corp., a publicly-traded global chemical and specialty materials company.
For Delrin, TJC has obtained financing for its $1.25 billion stake to be paid to DuPont at closing, which is expected before the end of this year, subject to customary closing conditions and regulatory approval. DuPont will also get a note receivable worth $350 million, and will own a 19.9% non-controlling common equity interest in the Delrin business.
DuPont CEO Ed Breen has set a strategy of transformation for the company away from some of its legacy products. | DBT PHOTO BY KATIE TABELING
“Today’s announcement largely completes our planned exit of the former M&M segment, advancing our position as a premier multi-industrial company,” DuPont CEO and Executive Chair Ed Breen said in a statement. “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,” he added.
Founded in 1982, TJC is a New York-based middle-market private equity firm that has raised more than $22 billion in funding commitments with experience in diversified industrials; technology, telecom and power; logistics & supply chain, and consumer and health care.
“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, in a statement. “For over 60 years the Delrin business has leveraged its differentiated technologies and global manufacturing presence to provide its customers with 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.”
Acetal homopolymer was discovered by DuPont in the 1950s, and today it is produced at plants in West Virginia and The Netherlands. The equity sale is not likely to impact company jobs in Delaware, and reportedly marks the end of two years of change for DuPont.
Breen told analysts on the company’s second quarter earnings report conference call that DuPont does not plan to make any more acquisitions this year or even early into 2024, saying, “We’re in a great spot, and I don’t feel like we need to do anything.”
The Delrin deal comes on the heels of the Aug. 1 closure of DuPont’s $1.75 billion deal for Spectrum Plastics, a specialty plastics manufacturer that focuses on the growing biopharmaceutical market.
Spectrum, which has 2,200 employees in 20 locations in North and Central America, the closest of which is in Wall Township, N.J., focuses on specialty medical devices and components, with a strategic focus on key fast-growing therapeutic areas such as structural heart, electrophysiology, surgical robotics and cardiovascular.
It produces a variety of tubing, catheters, balloons, laser processing, injection molding and packaging films, working with 22 of the top 26 medical device original equipment manufacturers (OEMs).
The addition of Spectrum complements DuPont’s existing offerings for biopharma and pharma processing, medical devices and packaging, including its Liveo silicone solutions and Tyvek medical packaging, the company said. It also would result in about 10% of DuPont’s consolidated revenue coming from health care, which is considered a low-cyclicality market.