DuPont to Purchase Rogers Corp. for $5.2B, Promote Most of Mobility & Supplies Unit

WILMINGTON, DE — On Nov. 2, DuPont introduced a sequence of actions advancing its technique as a premier multi-industrial firm centered on market-leading high-growth, high-margin companies with complementary expertise and monetary traits.

DuPont has entered right into a definitive settlement to accumulate Rogers Company for $5.2 billion. Rogers is a world chief in engineered supplies and parts, with unmatched utility engineering experience and main positions in markets the place its superior expertise options supply aggressive benefits. Its value-added merchandise embody high-frequency circuit supplies, ceramic substrates for energy semiconductor gadgets, and high-performance foams which go into a wide range of extremely specialised end-markets the place the corporate has sturdy, enduring buyer relationships. The transaction is anticipated to shut within the second quarter of 2022, topic to customary closing circumstances, together with approval by Rogers shareholders and receipt of relevant regulatory approvals.

As a part of its ongoing transformation, DuPont additionally introduced that it intends to divest a considerable portion of its Mobility & Supplies section. 

“With right this moment’s bulletins, we’re sharpening our deal with high-growth, high-value alternatives in sectors with regular long-term secular development traits the place our world innovation management permits a aggressive benefit,” mentioned Ed Breen, Govt Chairman and Chief Govt Officer of DuPont. “Shifting ahead, our portfolio might be centered on key pillars – electronics, water, safety, industrial applied sciences and next-generation automotive. We’re dedicated to investing in every of those pillars organically and thru strategic acquisitions to maximise our capabilities in areas that allow our prospects to develop by delivering next-generation applied sciences and sustainable excessive value-added options. These strategic steps are anticipated to create super alternatives for DuPont and Rogers workers and unlock important worth for shareholders.”

By focusing the portfolio on high-growth, high-margin companies intently tied to secular development areas, the mixed transactions are anticipated to considerably enhance DuPont’s top-line development, working EBITDA margins and cross-cycle earnings stability, placing us in step with best-in-class multi-industrial friends.

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Acquisition of Rogers Company

Rogers designs, develops, manufactures and sells high-performance and high-reliability engineered supplies and parts via its Superior Electronics Options (AES) and Elastomeric Materials Options (EMS) segments. Headquartered in Chandler, Arizona, Rogers has a workforce of greater than 3,500 workers with a world community of 14 manufacturing websites in North America, Europe, and Asia and 2021 anticipated revenues of roughly $950 million. 

Breen continued, “Constructing on our latest acquisition of Laird Efficiency Supplies, the acquisition of Rogers additional cements our place because the main digital options supplier within the {industry}. We’re constructing an unmatched portfolio that’s ideally positioned to capitalize on fast demand acceleration in high-growth markets, together with electrical automobiles, ADAS, 5G telecommunications and clear power. With industry-leading positions in every of its product classes, a confirmed historical past of utility engineering excellence and deep buyer relationships, Rogers is extremely complementary to and aligned strategically with our current Electronics & Industrial enterprise and is anticipated to ship compelling returns over the close to and long-term.”

“DuPont is a pure match for Rogers, as a number one superior supplies options supplier,” mentioned Bruce D. Hoechner, Rogers’ President and CEO. “DuPont is a confirmed chief in superior specialty supplies, and Rogers will profit from DuPont’s world attain and powerful technical and industrial depth. Like DuPont, Rogers’ success is constructed upon a devoted group of individuals dedicated to excellence and expertise management to resolve our prospects’ most complicated utility challenges. This mixture will create an thrilling subsequent chapter for Rogers’ prospects, workers and companions.”

DuPont expects to comprehend roughly $115 million in pre-tax run-rate price synergies by the top of 2023.  The price synergies related to each the Laird Efficiency Supplies acquisition and the supposed Rogers acquisition symbolize roughly 6% of the mixed income, together with DuPont Interconnect Options. The estimated one-time price to attain these synergies is roughly $75 million. DuPont expects the deal to be accretive to its top-line development, working EBITDA, free money movement, and adjusted EPS upon closing. The enterprise worth a number of of the transaction is roughly 19x estimated fiscal 2022 EBITDA on a stand-alone foundation and roughly 14x together with price synergies.

DuPont has dedicated financing in place for the acquisition of Rogers. DuPont plans on utilizing a portion of the proceeds from the deliberate divestiture of a considerable portion of the Mobility & Supplies section to repay all acquisition financing associated to Rogers and pursue extra development alternatives in its remaining key pillars as a part of its balanced capital deployment plan.

Intent to Divest Substantial Portion of Mobility & Supplies Section

DuPont intends to divest a considerable portion of its Mobility & Supplies section. The Mobility & Supplies section is comprised of category-defining companies with longstanding market-leading positions and differentiated merchandise, applied sciences and capabilities to win with prospects and outperform rivals. The companies throughout the Mobility & Supplies section which can be in-scope for supposed divestiture are predominantly these within the Engineering Polymers and Efficiency Resins traces of enterprise in addition to the Firm’s stake within the DuPont Teijin Movies three way partnership. The in-scope product traces embody, however should not restricted to, well-known and revered manufacturers akin to Zytel®, Delrin®, Hytrel®, Crastin®, Vamac® and TEDLAR®. Mixed, these companies symbolize roughly $4.2 billion in income and about $1.0 billion of working EBITDA primarily based on full 12 months 2021 estimates. 

“Discovering an possession mannequin that appropriately values the management positions and deep buyer worth proposition of the in-scope Mobility & Supplies portfolio will place the enterprise for continued success, leveraging its unmatched mixture of merchandise, applied sciences, and working experience for the advantages of its workers and prospects,” mentioned Breen. “Via unprecedented challenges prior to now 18 months, these groups have confirmed that their unwavering dedication to ship for his or her prospects, workers and companions has generated strong outcomes and I’m assured they’re properly outfitted to increase their management positions beneath new possession.”

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