Use the attached case, “DuPont Corporation: Sale of Performance Coatings” and complete the following three requirements. Be very thorough in your work and in your explanations and write the results as a report which is no more than four pages long (plus appendices for exhibits and spreadsheets).
Assess DPC’s fit within DuPont and use facts and figures given in the case to support your opinions. At a minimum, address the following:
What are its prospects going forward as a division of DuPont?
How does this align (or not align) with Kullman’s vision for the firm?
What is its potential value to an outside party?
How attractive is the division from the point-of-view of a strategic buyer?
How attractive is the division from the point-of-view of a private equity firm?
Conduct a valuation of the division to a buyer. At a minimum, address the following:
Explain why the methodology you chose was the best method to use.
Explain the use of leverage in the buyout and how this affects the valuation and the purchase decision.
Determine the sensitivity to and significance of key assumptions in your valuation.
Determine your recommendation to Kullman with regards to the sale of DPC. At a minimum, address the following:
Would the division be more valuable to DuPont as a continuing part of DuPont or would it be more valuable sold to an outside firm?
What is the net difference in value created by the decision you recommend compared to the alternative… in other words, what is the incremental value of sell-versus-keep or of keep-versus-sell.
Write a brief (3 or 4 sentence) statement which Kullman could release to the press regarding the decision you suggest. This needs to be a short quote which could be used in a press release or if she is interviewed.
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