DuPont has agreed to pay US private equity firm AEA Investors $1.75 billion to acquire Spectrum Plastics Group, a small specialty plastics company based in Atlanta, Georgia. The price is a 15.6x multiple on Spectrum’s forecast 2023 EBITDA.
The deal is expected to close in the third quarter, subject to regulatory approvals and other customary closing conditions.
The former chemicals giant, in recent years successively tweaked to focus on specialty products, plans to pay cash for the purchase, as it is sitting on sufficient reserves after divesting its Mobility & Materials segment to US engineering plastics producer Celanese for $11.2 billion last year.
With 2,200 employees at 20 locations in North and Central America, Spectrum manufactures specialty medical devices and components, with a strategic focus on key fast-growing therapeutic areas such as structural heart, electrophysiology, surgical robotics and cardiovascular.
Customers for the company’s product slate, which covers a variety of tubing, catheters, balloons, laser processing, injection molding and packaging films, are leading medical device original equipment manufacturers (OEMs).
In a conference call with analysts to discuss the purchase, DuPont CEO Ed Breen said Spectrum, which is “fully aligned with DuPont’s strategic objective of delivering innovative specialized materials and solutions into attractive end markets with long-term secular growth trends,” is a long-term customer and has been on the Wilmington, Delaware-headquartered chemical producer’s acquisition radar “for a very long time.”
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