The deal is expected to close in the third quarter, subject to regulatory approvals and other customary closing conditions.

The former chemicals giant, in recent years successively tweaked to focus on specialty products, plans to pay cash for the purchase, as it is sitting on sufficient reserves after divesting its Mobility & Materials segment to US engineering plastics producer Celanese for $11.2 billion last year.

With 2,200 employees at 20 locations in North and Central America, Spectrum manufactures specialty medical devices and components, with a strategic focus on key fast-growing therapeutic areas such as structural heart, electrophysiology, surgical robotics and cardiovascular.

Customers for the company’s product slate, which covers a variety of tubing, catheters, balloons, laser processing, injection molding and packaging films, are leading medical device original equipment manufacturers (OEMs).

In a conference call with analysts to discuss the purchase, DuPont CEO Ed Breen said Spectrum, which is “fully aligned with DuPont’s strategic objective of delivering innovative specialized materials and solutions into attractive end markets with long-term secular growth trends,” is a long-term customer and has been on the Wilmington, Delaware-headquartered chemical producer’s acquisition radar “for a very long time.”

The addition of the Georgia company that expects sales of around $500 million this year  would complement DuPont’s existing offerings for biopharma and pharma processing, medical devices and packaging, including its Liveo silicone solutions and Tyvek-brand medical packaging.

In future, around 10% of DuPont’s consolidated revenue should come from the low-cyclicality healthcare market, Breen said.

“The real opportunity here is going to be on the growth side,” the CEO told analysts. While he said DuPont’s connections to the medical market at present are mainly with biopharma OEMs, he noted that Spectrum’s customers are mostly medical device OEMs. “A lot of DuPont’s technology actually goes through companies like Spectrum into the biopharma sector,” he added.

Breen said DuPont is still planning to divest its industrial strength resin Delrin product line, with a sale potentially completed by the end of this year. Should but should a need for cash emerge, however, “we would lean toward additional share repurchases.”

Author: Dede Williams, Freelance Journalist