DuPont acquires Laird Performance; deal worth US$2.3 bn

US materials firm DuPont is paying US$2.3 billion to acquire specialty products maker Laird Performance Materials from private equity firm Advent International. The transaction is expected to close in the third quarter of 2021, subject to regulatory approvals and other customary closing conditions.

Advent International acquired Laird Performance Materials' parent company, UK-based Laird plc, in 2018 for US$1.3 billion. The company was subsequently divided into three separate entities: Performance Materials, Connectivity and Thermal Services.

Shanghai-headquartered Laird Performance Materials is a manufacturer of electromagnetic shielding and thermal management components and solutions that manage heat and protect devices from electromagnetic interference.

The company recorded US$465 million in 2020 revenues and has a workforce of 4,300 spanning 11 manufacturing sites in North America, Europe and Asia.

The transaction brings together DuPont’s technology portfolio in films, laminates, and plating chemistry with Laird Performance Materials’ electromagnetic shielding and thermal management solutions. The combined organisation will be a leader in rapidly growing advanced electronics applications supporting smart/autonomous vehicles, 5G telecommunications, artificial intelligence, internet of things, and high-performance computing.

"Laird Performance Materials is a strategic and complementary addition to the Electronics & Industrial business," said Ed Breen, Executive Chairman/CEO at Delaware-based DuPont, "and our applied material science expertise together with Laird Performance Materials' industry-leading application engineering capabilities further strengthens DuPont as an essential partner for major electronics OEMs and manufacturers."

DuPont expects to realise approximately US$60 million in pre-tax run-rate cost synergies by the end of 2024 with the majority realised in the first 18 months post-closing. The estimated one-time cost to achieve these synergies is approximately US$40 million. After adjusting for one-time costs and deal-related amortization, DuPont expects the deal to be accretive to its operating EBITDA margins, free cash flow, and adjusted EPS within the first 12 months and to achieve high single-digit ROIC by year five. The enterprise value multiple of the transaction is approximately 15x estimated 2021 EBITDA on a stand-alone basis and approximately 11x including cost synergies.

“This transaction represents another strategic step forward in sharpening our focus and directing our investments towards high-value, high-growth opportunities. We remain committed to a balanced capital allocation policy that delivers strong returns to shareholders and includes organic growth, targeted M&A, and shareholder remuneration,” said Breen.

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