DuPont (NYSE:DD) has made two strategic deals that will give the company access to unique technologies in the protection products business. Firstly, the company agreed to buy the Tensylon unit from BAE Systems for a cash payment of $18 million. Secondly, DuPont is buying a minority stake in Nanocomp technologies which will give the company exclusive rights in the armor protection and aerospace structures segments. 
DuPont also recently received approval for its acquisition of South African seed maker Pannar, which will give the company a greater foothold in the African agricultural market.
We have a $57 price estimate for DuPont’s stock, which is around 15% above the current market price.
Picks Up Protection Technologies
DuPont is buying the Tensylon unit from BAE Sytems for a cash payment of $18 million. Tensylon makes protective materials that have applications in the ballistic armor and commercial domains. DuPont hopes to capitalize on the acquired technology by developing products which can be used in military and industrial applications. According to the company, the total market for such materials is more than $1 billion annually.
DuPont is also buying a minority stake in Nanocomp Technologies, which is a producer of carbon nanotube-based products. The company builds high-end components which are used in the U.S. Department of Defense and NASA programs.  Nanocomp expects sales to surpass $20 million next year.  We estimate that the broader category of performance and safety materials is the most important division for DuPont, contributing almost 60% to the stock price.
Expanding in Africa
DuPont already has a presence in South Africa through its subsidiary Pioneer Hi-Bred, a producer of hybrid seeds. DuPont had first agreed to buy Pannar in 2010, but the deal was subject to approval by regulatory bodies. Pioneer, Pannar and Monsanto are the three major companies present in the country in this segment. With this acquisition, DuPont will command a market share nearly twice that of Monsanto.
Through South Africa, the company plans to make inroads into other African countries such as Kenya and Ghana where the use of genetically modified seeds is on the rise. The average yields in African countries is less than one-fifth that in developed countries so there is ample opportunity in terms of improvement of crop yields. 
Besides this investment, the company is also spending a considerable amount in the agricultural business to cash in on the growing demand. Recently, the company unveiled plans to spend $3 million in Ethiopia to expand seed production and storage facilities in the country. DuPont plans to spend a whopping $10 billion on research and development of solutions dedicated to agriculture and nutrient market by 2020.Notes:
- DuPont buys BAE unit, takes stake in U.S. start up, reuters.com, June 8, 2012 [↩] [↩]
- DuPont latest investor in $25M Nanocomp fundraise, masshightech.com, June 8, 2012 [↩]
- DuPont Purchase Of African Seed Company Gives Edge Over Monsanto–Executive, foxbusiness.com, May 31, 2012 [↩]