Carlyle to buy DuPont Colors business for $4.9b

DuPont Colors

DuPont Colors

The DuPont Co. informed that it was selling the performance coatings unit for $4.9 billion in cash to the Carlyle Group. DuPont wants to focus on higher gross area such as agriculture and nutrition. The $4.9 billion deal is not a first investment in automotive and industrial segment made by The Carlyle Group. This summer it sealed at least four acquisitions.

The 4.9b deal

The sale of the performance coating unit allows DuPont to reduce its debts, not to mention that the 4.9 billion deal also better positions the company for future purchases in sectors such as advanced materials and biotechnology. Carlyle, one of private equity’s top investors in industrial companies, gets the performance coatings unit which is the leader in the market with opportunities to expand its business in emerging economies such as China, Brazil and India.

Analysts have noted the active role of Carlyle these days. Its competitors, including Blackstone Group, KKR and TPG Group, have not been as active as Carlyle itself. According to analysts, the recent activity of the company coincides with Carlyle’s initial public offering which took place four months ago. Since then Carlyle’s shares have been steadily growing from a $22 per share to a $25.88 on Thursday, 30th of August.

The sale of the performance coatings unit is said to help DuPont focus on higher-margin businesses, including agriculture and nutrition, bio-based industrials, etc. Ellen Kullman, CEO at DuPont, highlighted that those business were the foundation of DuPont’s long-term growth targets. “The deal announced today is a continuation of the transformation of DuPont,” Ellen Kullman said.

The DuPont’s performance coatings unit employs approximately 11,000 workers and, according to data, it is expected to generate revenues valued at $4 billion this year. The sale of the performance coating unit is to be closed in the first quarter of 2013, however it has to obtain regulatory approvals. Carlyle will receive $250 million of DuPont’s unfunded pension liabilities, according to the deal.

Carlyle expands its businesses

The acquisition of performance coatings unit from DuPont is a 12th equity deal for Carlyle in 2012. So far Carlyle leads in buyouts this year. The total sum of its buyouts is valued at $15.3 billion.

However Gregory S. Ledford, head of industrial and transportation at Carlyle, noted that four recent contracts had been hard to close. As it was stated by him, negotiations had lasted for a long time. But the Carlyle’s recent deals show that company’s officials decided to invest in industries ranging from pumps, paint to petroleum.

Carlyle and Getty Images management paid $3.3 billion to buy Getty Images, the photo and digital archives library, just two weeks ago. Also this month, Carlyle bought TCW Group, a Los Angeles-based asset management company from Societe Generale for $700 million in cash.

But that is not the end of Carlyle’s recent purchases. The company acquired Hamilton Sundstrand’s industrial pumps business from parent United Technologies for $3.46 billion last month. Earlier Carlyle with Genesee & Wyoming bought RailAmerica for $1.4 billion.

Analyst, however, are not surprised with latest acquisitions of the company, given the availability of the capital. Besides Carlyle’s officials have recently noted that borrowing money for buying companies is easy.

Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

Recent Posts

UK watchdog whacks Amazon with probe for unfair data collection practices

UK watchdog whacks Amazon with probe for unfair data collection practices

The Competition and Markets Authority will focus on whether Amazon, Inc. favors merchants that use its delivery services.
1 day ago
Altice buys 12 percent stake in BT worth £2 billion

Altice buys 12 percent stake in BT worth £2 billion

Altice said it did not intend to make a bid for the British Telecoms company, though the takeover code also does not allow it to make an unsolicited buyout offer for six months wit
1 day ago
G7 countries agree on broad principles of minimum corporate tax deal

G7 countries agree on broad principles of minimum corporate tax deal

The world’s richest nations (G7) reached a landmark accord setting a global minimum corporate tax rate for multinationals. Would it be effective in tackling tax evasion and avoid
1 day ago
BC Partner goes the Continuation Fund way to strike a $7bn deal

BC Partner goes the Continuation Fund way to strike a $7bn deal

BC Partners, a UK private equity firm, has floated a “continuation fund” deal, one of Europe’s largest such deals, by transferring its 47 per cent stake in the academic publi
2 days ago
FDA approves Biogen’s $56,000 drug for Alzheimer’s

FDA approves Biogen’s $56,000 drug for Alzheimer’s

The Food and Drug Administration of the US approved on Monday Biogen Inc’s Aducanumab to treat Alzheimer’s disease amidst the controversy of its efficacy. Biogen has pr
3 days ago
UK watchdog’s plans for big banks to draw fair compete rules draws criticism

UK watchdog’s plans for big banks to draw fair compete rules draws criticism

Under UK Finance’s proposals, nine banks under investigation by the CMA would be obliged to fund a “future entity” for three years.
3 days ago