IFF to merge with DuPont's Nutrition & Biosciences unit via Reverse Morris Trust
IFF (IFF) and DuPont (DD) announced that they have entered into a definitive agreement for the merger of IFF and DuPont's Nutrition & Biosciences business in a Reverse Morris Trust transaction. The deal values the combined company at $45.4B on an enterprise value basis, reflecting a value of $26.2B for the N&B business based on IFF's share price as of December 13. Under the terms of the agreement, which has been unanimously approved by both boards, DuPont shareholders will own 55.4% of the shares of the new company and existing IFF shareholders will own 44.6%. Upon completion of the transaction, DuPont will receive a one-time $7.3B special cash payment, subject to certain adjustments. Upon closing, the new company's board will consist of 13 directors: seven current IFF directors and six DuPont director appointees until the annual meeting in 2022, when there will be six directors from each company. Andreas Fibig will continue to be the Chairman of the Board and an IFF appointee, he will also continue as Chief Executive Officer. The company will be headquartered in New York. DuPont Executive Chairman, Ed Breen, will join the board of the combined company as a DuPont appointee and will serve as Lead Independent Director starting June 1, 2021. IFF expects to realize cost synergies of approximately $300M on a run-rate basis by the end of the third year post-closing. In addition, the combined company's target is to deliver more than $400M in run-rate revenue synergies, which would result in more than $175M of EBITDA. IFF said it is "committed to maintaining an investment grade rating and plans to delever from approximately 4.0x at transaction close to below 3.0x by year two following closing." Following the close of the transaction, IFF expects that "substantially all of the debt of the combined company will be pari passu." IFF and N&B have obtained fully-committed debt financing from Morgan Stanley and Credit Suisse.