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Developing Business for a New Venture

An $800 million specialty chemicals manufacturer with a strong intellectual property portfolio was approached by the Electronic Materials Division of a $1.1 billion global producer of specialty chemicals. Explore how technology assessment and scenario planning could help that manufacturer structure a deal.

The Problem

The Electronic Materials Division had developed a strong intellectual property position for making cyclic olefin copolymers for photoresists, low dielectric polymer films, and optoelectronic devices, and had identified the CLIENT as a top candidate to become a venture partner. The CLIENT had single site catalysis expertise necessary to make the olefin copolymers and an excellent record for manufacturing specialty chemicals.

The CLIENT sought a detailed assessment of the technology offered by the Electronic Materials Division, a market analysis of the target applications, and a recommendation how a deal might be structured.

The Approach

A situation overview was conducted to describe the strategic objectives of the CLIENT and the Electronic Materials Division. The market position, sales channels, manufacturing expertise, and R&D and technical service capabilities were assessed for each party. Scenarios were developed for possible deals, ranging from transactional (e.g., license or resell) to permanent (e.g., joint venture or equity position) relationships.

The technology areas were studied in depth and tied to the market dynamics and proposed product offerings for each application area. Technical and business discussions were conducted on behalf of the CLIENT with key potential customers of the technology using face-to-face meetings and telephone interviews.

The Results

The CLIENT received a thorough understanding for a potential business opportunity and a quantitative valuation for a joint venture that could develop into $300 million new special polymer business with a 25% return on capital.

Additionally, the CLIENT received a technology assessment and a market study which validated the best opportunity for revenue and profit was 193 and 157 nanometer photoresist applications, supported the further business development in chip scale packaging, wafer passivation, and coatings for high-end laminates, and a list of potential alliance partners for flat panel displays and optical wave guides.