DD
E.I. Du Pont De Nemours & Co
Industrial/Transportation, Event Driven/Special Sit
03/06/2017
Presented
| Date | 03/01/2017 |
| Price | $79.71 |
| Market Cap | $69.54B |
| Ent Value | $67.04B |
| P/E Ratio | 27.92x |
| Book Value | $11.31 |
| Div Yield | 0.02% |
| Shares O/S | 872.36M |
| Ave Daily Vol | 2,642,523 |
| Short Int | N/A |
Current
| Price | $84.71 |
| Market Cap | $35.37B |
| E.I. du Pont de Nemours & Co. engages in providing science-based products and services. It operates through the following business segments; Agriculture, Electronics & Communications, Industrial Biosciences, Nutrition & Health, Performance Materials and Safety &Protection. The Agriculture segment business deliver a broad portfolio of products and services that are specifically targeted to achieve gains in crop yields and productivity, including pioneer brand seed products and well-established brands of insecticides, fungicides and herbicides. The Electronics & Communications segment supplies differentiated materials and systems for photovoltaics, consumer electronics, displays and advanced printing that enable superior performance and lower total cost of ownership for customers. The Industrial Biosciences segment develops and manufactures a broad portfolio of bio-based products, enzymes that add value and functionality to a broad range of products and processes such as animal nutrition, detergents, food manufacturing, ethanol production and industrial applications resulting in cost and process benefits, better product performance and improved environmental outcomes. The Nutrition & Health offers sustainable, bio-based ingredients and advanced molecular diagnostic solutions, providing innovative solutions for specialty food ingredients, food nutrition, health and safety. The segment's products include cultures, emulsifiers, gums, natural sweeteners and soy-based food ingredients, hold leading market positions based on industry leading innovation, relevant product portfolio and close-partnering with the world's food manufacturers. The Performance Materials segment provides polymers, elastomers, films, parts, and systems and solutions which improve the uniqueness, functionality and profitability of its customer's offerings. The Safety & Protection segment businesses, protection technologies, sustainable solutions and building innovations, delivers products and services to a large number of markets, including construction, transportation, communications, industrial chemicals, oil and gas, electric utilities, automotive, manufacturing, defense, homeland security and safety consulting. The company was founded by Eleuthere Irenee du Pont in 1802 and is headquartered in Wilmington, DE. |
Publicly traded companies mentioned herein: Dow Chemical Corp (DOW), E I Du Pont De Nemours And Co (DD), FMC Corp (FMC)
Highlights
The presenter is long shares of both Dow and DuPont ahead of the deal closing and said he sees a >90% probability of it being successful. He believes the European competition regulators are close to being satisfied and the work for US regulators is “definitely done”. The companies have to name the buyer for the divested assets within the next month to satisfy the EU regulators as the deadline is April 4th. And, there is the potential for FMC or another party to pick-off valuable assets, and this is why he owns FMC as well. He also believes the ag cycle is at or near a bottom, which should provide fundamental support to an already cheap company. On a pro forma basis, he sees Dow+DuPont trading at just 7.5x EBITDA, and this is calculated with a discounted synergy benefit. Commodity chemicals companies generally trade at 7x - 7.5x, so downside risk should be minimal. On the upside, specialty chemical companies trade at 12x EBITDA or better and the stock of the pro forma company should be fairly valued in the $100-110 range, depending on the multiple and total synergies.
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