DuPont Co said on Friday it had acquired a unit of Britain’s BAE Systems Plc and taken a minority stake in a U.S. high-technology start up, Nanocomp Technologies Inc, to expand its portfolio of high-performance protection materials.
DuPont, maker of Kevlar and other advanced materials, will acquire Tensylon from BAE Systems for $18 million in cash, BAE Systems said. Tensylon makes a trademarked protective material that has both ballistic armor and commercial applications. BAE said it expected the sale to close in the third quarter of 2012.
DuPont said the new technology platforms would help it expand its existing business and develop new products for use in military, law enforcement and industrial applications. It put the overall market for such materials at more than $1 billion annually.
“This is the next phase in our plan to protect more people, critical processes and the environment from more hazards around the world,” said Thomas Powell, president of DuPont Protection Technologies.
Nanocomp said the financial and strategic agreement with DuPont was “a very big deal” for the New Hampshire-based company, which uses lightweight and incredibly strong carbon nanotubes to build components for U.S. military and aerospace programs. It expects sales to exceed $20 million next year.
Nanocomp Chief Executive Peter Antoinette told Reuters that DuPont’s investment would allow it to accelerate its expansion into new and bigger markets. It would be able to tap DuPont’s experience in scaling new technologies for industrial use.
Neither DuPont nor Nanocomp gave financial details of the agreement.
“We’re placing our bets with one of the … if not THE premier material sciences corporations in the world,” Antoinette said.
“It also puts a stamp of approval on the technology and the company,” he said, noting that the carbon nanotubes had been looking for a big success in the industrial market for two decades. Now other companies would be more inclined to order parts or materials from Nanocomp, he said.
Antoinette said DuPont had agreed to assume a share of Nanocomp’s $25 million Series C financing round that is due to close later this year. He said Nanocomp planned to remain independent, but could consider a public offering or a partnership with a larger company in several years.
Nanocomp said it will use the funding to expand its manufacturing capacity and underwrite market expansion, as it completes its transition into a new, 100,000-square foot production facility in Merrimack, New Hampshire.
Nanocomp makes yarn, wire, tape and sheet products using carbon nanotubes, which can absorb microwave or radar signals, and are incredibly conductive of electricity. It spins the tubes into materials that are used in everything from body armor to classified government satellites and wiring on airplanes.
The Department of Defense recently designated Nanocomp materials as “critical for national defense.”
Powell said the government’s drive for greater energy efficiency would increase demand for more lightweight and strong materials, such as those made of carbon nanotubes. He expected DuPont to expand its agreement with Nanocomp in coming years.
He said the current deal gave DuPont exclusive rights in the armor protection segment, and aerospace structures.
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