November 3, 2015

Eric Degenfelder ’86 Provides Inside Look Into $5B DuPont Sale

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Eric Degenfelder ’86 shared lessons about business communication and the ever changing nature of the that economy he learned through   selling the paint coating branch of DuPont Company,  to The Carlyle Group for over five billion dollars.

Degenfelder said during Monday’s Olin Hall lecture that he was working for DuPont Company in August 2011 when the company decided to sell its paint coating brand. He was asked to spearhead this change as the vice president of transition.

“The night before the sale I was in the office until about 10 at night just signing documents, because I was the legal representative, [waiting] for the sale to go through,” he said.

Degenfelder said the sale of the independent branch of DuPont in August of 2012 to the Washington, D.C.-based Carlyle Group, a private equity firm  was ultimately a good deal for the buyers.

“The price was five billion dollars, and at the time we said, ‘Man that’s a high price, boy they’re getting ripped off,’” he said. “But it turned out that [The Carlyle Group was] very smart because the return they’ve gotten since then has been way better than five billion dollars.”

After severing ties with DuPont, Degenfelder said he renamed the company Axalta in order to give it a  unique identity, one independent from DuPont.

Many people associate Dupont with “this red oval and science” according to Degenfelder. He said that he and the other founders of wanted to brand Axalta as more costumer focused, fast paced and dynamic.

Degenfelder also said that he learned during the transformation that a company’s transition period highlights the importance of strong internal communication, to prevent unsettling sentiments.

“The world doesn’t stand still,” he said. “Any industry you look at is going through rapid change, and that creates merger and acquisition activity. Private equity takes advantage of that.”

Degenfelder said that since the coating brand severed from DuPont, it has become successful and has developed factories and research development offices around the world.

“We’ve got a global footprint to serve our customers,” he said. “We have manufacturing in the United States but also in South America, in Europe and in Asia. We need a global supply and support network to serve our automotive customers.”

Degenfelder, said his specific experience — selling the paint coating company to the private equity firm The Carlyle Group — is relevant to anyone who plans to work in the business world.

“If you get out there and you’re working in industry, it is likely that you’re going to come into contact with some activity like this sooner or later. […] You might get bought by private equity,” he said. “I would encourage you to just run with it.”