Dive Brief:
- Chemical giant DuPont de Nemours Inc. announced plans last week to acquire medical device manufacturer Spectrum Plastics Group from private equity firm AEA Investors for $1.75 billion.
- Spectrum Plastics Group is a long-time customer of DuPont, using the company’s popular Tyvek in its sterile medical packaging. The medical plastics manufacturer will bring with it customer relationships with 22 of the top medical device producers in therapeutic areas including surgical robotics and cardiovascular.
- The pending deal fits into DuPont’s strategy to expand its healthcare offerings, Executive Chair and CEO Ed Breen said on the company’s May 2 earnings call. The acquisition is expected to close by the end of Q3.
Dive Insight:
Spectrum Plastics Group’s portfolio adds to DuPont’s market share in biopharmaceutical consumables, fitting in well with the company’s existing medical device offerings, Breen said on the call.
DuPont’s portfolio includes medical device brand Liveo, its medical device and biopharma consumables business, and its Tyvek healthcare packaging business. With the addition of Spectrum Plastics Group, the healthcare segment now represents approximately 10% of DuPont’s total sales, Breen said.
“These businesses are expected to grow at high single-digit rates over time and even faster in 2023 due to specific business wins in place,” Breen said.
DuPont expects the medical device manufacturer to generate about $500 million in revenue this year, the CEO noted.
It’s been almost two years since DuPont’s last publicized acquisition. In 2021, the chemical company acquired electronics manufacturer Laird Performance Materials for $2.3 billion.
The company almost acquired electronics manufacturer Roger Corp. last year, but the deal was terminated in November when it failed to pass regulatory clearance. As a result of the agreement, DuPont paid Rogers a $162.5 million termination fee.
With its acquisition of Spectrum Plastics Group, Breen said DuPont is finished with mergers and acquisitions for now
“We like where we’re at. This was the last piece we were looking at. And so, I don’t see anything over the next like year,” Breen told investors. “I think we like where the portfolio is at. We just want to operationally run it well.”
