Carlyle to buy DuPont Performance Coatings for $4.9 billion
Aug. 30, 2012—Global alternative asset manager The Carlyle Group has entered into a definitive agreement to purchase DuPont Performance Coatings (DPC) for $4.9 billion.
The transaction is expected to close during the first quarter of 2013. The Carlyle Group, which manages $156 billion of assets, will fund the investment with cash using equity from Carlyle Partners V and Carlyle Europe Partners III.
DPC is a global supplier of vehicle and industrial coating systems with expected sales of more than $4 billion in 2012. The 11,000-employee company operates manufacturing sites on six continents, and serves customers in 120 countries through roughly 4,000 distributors.
“DuPont Performance Coatings is a leader in the automotive and industrial coatings sectors with world-class products and customer service. The business continues to grow and deliver solid results. After a careful review, however, we have determined that DPC’s full growth potential would be best realized outside DuPont and through the sale to Carlyle,” said Ellen Kullman, chair and CEO of DuPont. “This transaction is consistent with our vision to be the world’s most dynamic science company and long-term strategy of driving competitive advantages in agriculture and nutrition, advanced materials and biotechnology, which represent high-growth, high-margin opportunities.”
Kullman said DuPont will continue to serve the automotive industry. DuPont will generate more than $3 billion in sales of advanced materials to the auto industry after the transaction closes.
“We will continue to work closely with automotive customers to apply our science-powered innovations related to light weighting of vehicles, revolutionary and environmentally friendly refrigerants, bio-based seat fabrics and headliners, and next-generation biofuels,” Kullman said.
Greg Ledford, managing director of The Carlyle Group and head of its Industrial and Transportation team, said the company will make targeted investments to support DPC’s product development and growth objectives as it transitions into a stand-alone company.
“DuPont Performance Coatings is a successful business with attractive market positions, next-generation technology and established brands,” Ledford said. “We look forward to working with management to fully realize DPC’s great potential.”
DuPont will classify and report sales results of Wilmington. Del.-based DPC as discontinued operations beginning in the third quarter of 2012. DuPont expects 2012 full-year earnings from discontinued operations to range between $.41 and $.47 per share.
DuPont said it will eliminate corporate overhead costs that were previously allocated to DPC but not included in the transaction. As part of the transaction, The Carlyle Group will assume $250 million of DuPont’s unfunded pension liabilities.