DuPont Offers About $275 a Share for Rogers Corp.
DuPont Offers About $275 a Share for Rogers Corp.
(Bloomberg) -- DuPont Inc. soared the most in 18 months after announcing it would buy engineering materials maker Rogers Corp. for about $5.2 billion to tap into the rapid growth of electric vehicles and advanced auto electronics.
The shares jumped 7.9% to $76.87 at 2:22 p.m. in New York after climbing 9.8%, the most intraday since April 6, 2020. Rogers surged 30% to $270.01 after gaining 31%, the biggest intraday advance for the Chandler, Arizona-based company since 1999.
The deal values Rogers shares at $277 each, a third more than Monday’s closing price. In addition to high-tech cars, the purchase announced Tuesday would boost DuPont’s position in advanced materials for other key growth markets such as clean energy and 5G mobile-phone service, the company said.
DuPont also announced plans to sell most of its Mobility and Materials business, which makes polymers and resins for vehicles. Taken together, the deals will deepen the chemical maker’s reach in fast-growing, higher-margin industrial and electronics markets and make its earnings more stable, the Wilmington, Delaware-based company said.
“We are sharpening our focus on high-growth, high-value opportunities in sectors with steady long-term secular growth trends,” DuPont Chief Executive Officer Ed Breen said in the statement. The company plans to further invest “organically and through strategic acquisitions to maximize our capabilities,” he said.
The deals would add to Breen’s reputation for deal making, after he engineered the 2012 breakup of Tyco International and oversaw the 2000 sale of General Instrument. Rogers, based in Chandler, Arizona, develops advanced electronic materials.
DuPont expects that Mobility and Materials will generate $4.2 billion in sales this year. Marketing the operation could take as long as six months, with the sale expected to be completed by the fourth quarter of next year. Proceeds from the sale will be used to help fund the purchase of Rogers, it said.
What Bloomberg Intelligence Says:
“The acquisition confirms DuPont’s strategy of reshaping its faster-growing electronics and industrial portfolio. The deal represents a healthy 22.7x 2021 consensus Ebitda of $220 million and would add about $950 million -- about 6% -- to DuPont’s revenue.”
-- Christopher Perrella, BI senior chemicals industry analyst
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Breen led the 2017 tie-up of DuPont and Dow Chemical Co., the largest-ever chemicals industry merger, and the subsequent breakup that formed a standalone DuPont, Dow Inc. and Corteva Inc.
Earlier this year, DuPont acquired Laird Performance Materials, which specializes in advanced electronic materials for autonomous vehicles, in a $2.3 billion deal.
The company on Tuesday also reported third-quarter results and cut its full-year forecast because of a slowdown in orders tied to the global semiconductor shortage.
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