- 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?
- 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?
- What minimum bid should Ellen Kullman set if she chooses to sell DPC?
- 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