8-KMaterial AgreementsRegulation FDExhibits & Filings

EIDP, Inc. 8-K Report, Material Agreement (Sep 4, 2012)

Filed September 4, 2012For Securities:CTA-PBCTA-PA

Summary

E. I. du Pont de Nemours and Company (DuPont) has entered into a definitive Purchase Agreement to sell its Performance Coatings business (the Business) to Flash Bermuda Co. Ltd., a company formed by affiliates of The Carlyle Group. The transaction is valued at approximately $4.9 billion in cash, plus the assumption of certain liabilities, including roughly $250 million in unfunded pension obligations. This significant divestiture by DuPont aims to streamline its operations and focus on core areas. Investors should note that the deal is subject to customary closing conditions, including antitrust approvals from various governmental bodies and the absence of any material adverse effects. The financing for the transaction is secured through equity commitments from Carlyle Group affiliates and debt financing from a syndicate of major financial institutions. While the Buyer's obligations are not contingent on financing, a key condition is the completion of a 15-business day "Marketing Period" before closing. DuPont is entitled to a reverse termination fee of $330,750,000 under specific circumstances, such as a material breach by the Buyer or failure to close when conditions are met. The agreement includes provisions for mutual indemnification and ancillary agreements like transition services and intellectual property licenses.

Key Highlights

  • 1DuPont to sell its Performance Coatings business for $4.9 billion in cash.
  • 2Buyer is Flash Bermuda Co. Ltd., formed by affiliates of The Carlyle Group.
  • 3Transaction includes assumption of approximately $250 million in unfunded pension liabilities.
  • 4Deal is subject to antitrust approvals (HSR, EU Commission, etc.) and other closing conditions.
  • 5Financing is secured by equity commitments from Carlyle and debt financing from multiple banks.
  • 6DuPont is eligible for a $330.75 million reverse termination fee under certain conditions.
  • 7Ancillary agreements, including transition services and IP licenses, will be executed.

Frequently Asked Questions

E. I. du Pont de Nemours and Company (DuPont) is selling its Performance Coatings business to Flash Bermuda Co. Ltd., an entity formed by affiliates of The Carlyle Group, for approximately $4.9 billion in cash, plus the assumption of certain liabilities including around $250 million in unfunded pension obligations.

The transaction is contingent upon several conditions, including the expiration or termination of waiting periods under antitrust laws (like the Hart-Scott-Rodino Act in the US and clearances from the European Commission), the absence of any prohibitory statutes or injunctions, and no "Material Adverse Effect" on the business. Both parties must also uphold their contractual obligations and representations.

The Buyer has secured commitments for both equity financing from affiliates of The Carlyle Group and debt financing from a consortium of major financial institutions, including Barclays Bank, Credit Suisse, Citigroup, Deutsche Bank, Morgan Stanley, UBS, and Jeffries.

DuPont is entitled to a reverse termination fee of $330,750,000 if the Buyer materially breaches the agreement causing closing conditions to fail, or if the Buyer fails to close when all conditions are met. There is also a mutual right to terminate if the closing has not occurred by May 1, 2013.