Delrin launches as new company after DuPont sale

WILMINGTON – Delrin has become Delaware’s newest company after DuPont closed a majority stake sale of its former namesake product line on Wednesday to a private equity firm.

DuPont will retain an interest in the new company that manufactures a plastic-like product that is used for high-load mechanical applications such as gears, safety restraints, door systems, conveyor belts, health care delivery devices, and more. It sold 80.1% of the ownership interest to TJC, formerly known as The Jordan Company, in a deal that values the line at $1.8 billion.

The sale is the latest planned divestiture for Wilmington-headquartered DuPont since it reorganized and refocused the advanced materials company toward electric vehicles, 5G telecommunications and clean energy.

DuPont received a $1.28 million pre-tax cash payment in that deal, along with a note receivable worth $350 million, due to be repaid within eight years. It still owns a 19.9% non-controlling common equity interest in Delrin.

“This deal was structured to maximize value for our shareholders. It provides significant upfront cash proceeds with minimal expected tax impact, which can then be deployed in line with our strategic priorities,” DuPont CEO and Executive Chair Ed Breen told analysts in the company’s third quarter earnings report call Wednesday morning. “It also provides an opportunity for us to participate in future upside returns upon the exit of our retained interest in Delrin. TJC has an excellent track record of creating value, and we look forward to leveraging their talent and focus to continue to grow the high-quality Delrin business.”

Delrin will be headquartered at the DuPont Experimental Station after spinning out from DuPont. | DBT PHOTO BY JACOB OWENS

The new company is headquartered at the DuPont Experimental Station near Wilmington and has roughly 600 employees around the world, according to a spokesman. Taking over Delrin as president and CEO is Juergen Pongratz, who was most recently president of biotherapeutics and pharmaceuticals at ILC Dover, another longtime Delaware company based in Frederica. Prior to that, he served at Celanese, Avantor and BASF over a 24-year career.

“I am excited to join the Delrin team at this pivotal moment. It is an iconic brand, and we will drive success for our customers, suppliers and employees by focusing on our core strength of making the world’s leading homopolymer – a product unrivaled in the industry,” he said in a statement.

Sriram Nadathur, who had led Delrin under DuPont, has been promoted to senior vice president and general manager of Delrin. He has 18 years of experience across DuPont, Crane Co. and McKinsey.

Sriram Nadathur, who previously oversaw DuPont’s Delrin product line, will become senior vice president of the new company. | DBT PHOTO BY KATIE TABELING

“We are thrilled for the future of Delrin under our new ownership and look forward to delighting our customers as we grow the business,” he added in a statement.

The new company also poached a C-Suite executive from another former DuPont company, bringing in Dean Meyer as chief information officer after serving in the same role at Chemours since 2015. Prior to that, he held various IT leadership and development roles at Hexion, Delphi Automotive, and Dow Chemical.

Founded in 1982, TJC is a New York-based middle-market private equity firm that has raised more than $22 billion in funding commitments with experience in diversified industrials; technology, telecom and power; logistics & supply chain, and consumer and health care.

“We look forward to partnering with the Delrin team to continue building a world class organization, elevating customer relationships, enhancing capabilities across design, technology, commercial and operational functions, and delivering exemplary customer service,” said Ian Arons, partner at TJC, in a statement.

The equity sale of Delrin comes on the heels of the Aug. 1 closure of DuPont’s $1.75 billion deal with Spectrum Plastics, a specialty plastics manufacturer that focuses on the growing biopharmaceutical market.

DuPont has already completed $3.25 billion in share repurchases with cash it brought in from prior segment divestitures and is starting a new $2 billion round that it aims to finish by early next year. The proceeds from the Delrin sale will likely lead to even further buybacks next year as the company looks to bolster its stock price.

That comes as DuPont lowered its outlook for annual revenue to $12.17 billion from an earlier range of $12.45 billion to $12.55 billion due to lower product demand, especially in the Chinese and European markets. That could lead to “restructuring actions” before the end of the year, Breen said.