DuPont to divest engineered polymers, performance resins and acquire Rogers Corporation for $5.2 billion

DuPont has announced that it will divest a significant portion of its Mobility & Materials portfolio and acquire Rogers Corporation (Chandler, Arizona), a producer of advanced materials, for approximately $5.2 billion.

The combined actions “strengthen DuPont’s positions in high-growth, high-margin markets” and significantly improves cross-cycle earnings stability, DuPont says. On a conference call earlier today, DuPont chairman and CEO Ed Breen noted that the Mobility & Materials portfolio has historically accounted for most of DuPont’s earnings volatility.

Rogers is a global leader in engineered materials and components, with leading positions in high-frequency circuit materials, ceramic substrates for power semiconductor devices, and high-performance foams. Rogers is expected to report 2021 sales of around $950 million and employ 3,500 across 14 manufacturing sites in North America, Europe, and Asia.

DuPont says the deal will expand its position in electric vehicles, advanced driver-assistance systems, 5G telecommunications, and clean energy.

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 DuPont’s stake in the DuPont Teijin Films joint venture. The in-scope product lines include, but are not limited to, 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.

“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,” Breen says. “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.”

The all-cash acquisition of Rogers is expected to close in the second quarter of 2022, subject to regulatory approvals and approval by Rogers’ shareholders. Rogers’ shareholders will receive $277 in cash per share, representing a 33% premium over Rogers’ closing share price on 1 November 2021 and a 46% premium to the 1-month weighted-average share price. Following the closing of the transaction, Rogers will be integrated into DuPont’s Electronics & Industrial business unit.

The Rogers deal also enhances the growth and cost synergy potential from the combination of DuPont E&I and electronic chemicals maker Laird Performance Materials, which DuPont acquired earlier this year for $2.3 billion.

DuPont expects to realize approximately $115 million in pretax 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 standalone basis and approximately 14x including cost synergies.




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