Carlyle Group LP (CG), Monsanto Company (MON): E I Du Pont De Nemours And Co (DD)’s Really Being Strengthened by Going to Seed

Page 1 of 2

I can’t quite claim to have monitored E I Du Pont De Nemours And Co (NYSE:DD) since its founding back in 1802 as a gunpowder manufacturer. In the past few years, however, the big Delaware company has initiated a somewhat quiet restructuring that promises to make it far less cyclical and more compelling for investors.

Steadily buying and selling

In early 2011, for instance, the company acquired Danisco, a global enzyme and specialty food ingredients company based in Denmark. For $6.3 billion, including the assumption of debt, E I Du Pont De Nemours And Co (NYSE:DD) added a unit that, as is the case with its own fast-expanding agricultural unit, will be driven in the years and decades to come by our planet’s expected dramatic population growth.

E I Du Pont De Nemours And Co

Conversely, in 2012 the company accepted nearly $5 million from private equity’s Carlyle Group LP (NASDAQ:CG) for its car paint unit. The deal turned out to be one of more than a dozen salted away by Carlyle during the year.

Those deals, along with other trends at the company, indicate that the significant restructuring largely initiated during the reign of the company’s competent CEO, Ellen Kuhlman, is likely to continue and perhaps expand. As was manifested strongly in the second quarter, E I Du Pont De Nemours And Co (NYSE:DD) continues to follow in the footsteps of its rival Monsanto Company (NYSE:MON) in emphasizing agriculture and related areas (read Danisco’s food and enzyme products), while shedding its former base in more cyclical chemicals operations.

The new backbone

At was expected, DuPont’s ag unit — largely bioengineered seeds and pesticides — led the way in the quarter, with revenues that constituted 37% of the total and expanded by 7%. But as I noted at the time, the performance chemicals segment saw its revenue dip by 15% and its operating earnings plunge by 56%.

Kuhlman et al. noted unequivocally at release time that they’d be better off without performance chemicals, which was hit hardest by excessive capacity and low prices for titanium dioxide, a whitening agent used in a host of products. A figurative “for sale” sign has clearly been placed in front of the unit, with the notion that it’d fetch about $10 billion, potentially from one of Carlyle Group LP (NASDAQ:CG)’s private equity brethren.

It’s noteworthy, however, that E I Du Pont De Nemours And Co (NYSE:DD)’s isn’t the only titanium dioxide unit on the market. Huntsman Corporation (NYSE:HUN), which also manufactures the agent, will similarly be vying for buyers’ attention for its own operation.

A brightening in darkest Africa

Back on the debit side of the ledger, soon after announcing its second-quarter results, DuPont told us that, following a three-year struggle, it had completed the acquisition of South Africa’s Pannar Seed. The purchase, which was first announced in September 2010, obviously will further expand agriculture’s base at the company. And with it (and assuming that performance chemicals is jettisoned), I’m projecting that the three-segment agriculture- and food-related group will easily account for as much as 75% of total revenues by the end of 2015.

Let’s look at what all this means to likely sources of the company’s revenues in the not-too-distant future. In the most recent quarter, agriculture and its related segments accounted for nearly 49% of E I Du Pont De Nemours And Co (NYSE:DD)’s total sales. Where I went to school, that’s about half. But had performance chemicals been unloaded before June 30, agriculture, biosciences, and nutrition would have been responsible for nearly 60% of the total.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!