(By Balaseshan) Global alternative asset manager Carlyle Group LP (NASDAQ:CG) has agreed to buy DuPont Performance Coatings (DPC) from E I Du Pont De Nemours And Co. (NYSE:DD) for $4.9 billion in cash.
As part of the transaction, Carlyle will assume $250 million of DuPont's unfunded pension liabilities. DuPont will use the net after-tax proceeds of this sale in a manner consistent with its cash deployment principles and goal to maximize shareholder value creation.
DuPont plans to eliminate general corporate overhead costs that were previously allocated to DPC but are not part of the transaction. Additional details will be provided during DuPont's third quarter earnings announcement.
DPC is a global supplier of vehicle and industrial coating systems with 2012 expected sales of more than $4 billion and more than 11,000 employees. The investment will be funded with equity from Carlyle Partners V and Carlyle Europe Partners III.
"The business continues to grow and deliver solid results. After a careful review, however, we have determined that DPC's full growth potential would be best realized outside DuPont and through the sale to Carlyle," said DuPont Chair and CEO Ellen Kullman.
DuPont said this transaction is consistent with its long-term strategy of driving competitive advantages in agriculture and nutrition, advanced materials and biotechnology, which represent high-growth, high-margin opportunities.
Beginning with the third quarter 2012, DuPont will classify and report results of DPC as discontinued operations on a retroactive basis. For the full year 2012, DuPont expects earnings from discontinued operations of $0.41 to $0.47 per share.
The company will provide full-year 2012 guidance from continuing operations on October 23 in its third quarter results. Following the closing of this transaction, DuPont will generate more than $3 billion in sales of advanced materials to the auto industry.
The transaction is expected to close in the first quarter 2013, subject to customary closing conditions and regulatory approvals.
DD closed Wednesday's regular session up 0.28% at $49.94, while CG ended up 1.38% at $25.79.