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DuPont (DD) to Buy Laird Performance Materials From Advent

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DuPont de Nemours, Inc. DD entered into an agreement with Advent International to acquire Laird Performance Materials. The transaction is valued at $2.3 billion, which will be paid from existing cash balances. The deal is expected to be completed in the third quarter of 2021, subject to regulatory approvals and other customary closing conditions.

Laird Performance Materials is a global leader in high-performance electromagnetic shielding as well as thermal management with an offering of performance components and solutions that manage heat and protect devices from electromagnetic interference. It has a workforce of more than 4,300 employees and a vast network of 11 manufacturing sites in North America, Europe and Asia. The company’s 2020 revenues were $465 million.

The acquisition of Laird is a big step in DuPont’s strategy to grow as a global innovation leader and premier multi-industrial company.

The deal combines DuPont’s technology portfolio in films, laminates and plating chemistry with Laird’s electromagnetic shielding and thermal management solutions. The combined company, with best innovation and product portfolio, is expected to be a leader in fast-growing advanced electronics applications that support 5G telecommunications, artificial intelligence, internet of things and high-performance computing.

Shares of DuPont have gained 97.3% in the past year compared with 63.3% rise of the industry.

DuPont, in its last earnings call, stated that it expects adjusted earnings per share for full-year 2021 in the band of $3.30-$3.45. The projection suggests a 68% increase at the mid-point from 2020 adjusted earnings of $2.01 per share.

Net sales for the year are forecast to be between $15.4 billion and $15.6 billion, reflecting an increase of 8% at the mid-point from 2020 net sales of $14.3 billion.

For the first quarter of 2021, DuPont expects net sales in the band of $3.75-$3.85 billion, that suggests 4% rise at the mid-point from $3.7 billion in the prior-year quarter. Adjusted earnings were predicted in the range of 75-77 cents per share, indicating a 58% increase at the mid-point from 48 cents per share in the prior-year quarter.

Zacks Rank & Key Picks

DuPont currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Fortescue Metals Group Limited FSUGY, BHP Group BHP and Impala Platinum Holdings Limited IMPUY.

Fortescue has a projected earnings growth rate of 95.4% for the current fiscal. The company’s shares have surged around 182.4% in a year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BHP has an expected earnings growth rate of 69.2% for the current fiscal. The company’s shares have gained 100.8% in the past year. It currently sports a Zacks Rank #1.

Impala has an expected earnings growth rate of 186.9% for the current fiscal. The company’s shares have rallied around 141.7% in the past year. It currently sports a Zacks Rank #1.

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