1. Assess DPC’s fit within DuPont.  What are its prospects going forward as a division within DuPont versus its potential value to an outside party?
  2. How attractive is DPC as an acquisition from a strategic buyer’s or PE firm’s perspective?  What are the potential risks to such a deal?
  3. What minimum bid should Ellen Kullman set if she chooses to sell DPC?
  4. Working from Case Exhibit 9, relative to the stand-alone value, estimate the dollar increase in DPC’s value if a PE fund can obtain:
    • 5% revenue growth per annum (versus 4% growth) in each of the next five years and improve the operating margin to 12% (versus 10%)
    • The division can be sold at 7.5x EBITDA in five years
    • Debt financing equal to 6.0x forward EBITDA can be obtained, and that all available free cash is used to repay debt in each of the next 5 years

 

DuPont Corporation: Sale of Performance Coatings