3M to Acquire Scott Safety from Johnson Controls
March 16 2017 - 8:19AM
Business Wire
Acquisition Expands 3M’s Presence in Personal
Safety Industry
3M (NYSE: MMM) today announced that it has entered into a
definitive agreement to acquire Scott Safety from Johnson Controls
for a total enterprise value of $2.0 billion. Scott Safety is a
premier manufacturer of innovative products, including
self-contained breathing apparatus (SCBA) systems, gas and flame
detection instruments, and other safety devices that complement
3M’s personal safety portfolio.
“Personal safety is a core growth business within the 3M
portfolio,” said Inge G. Thulin, 3M chairman, president and chief
executive officer. “This acquisition leverages our fundamental
strengths in technology, manufacturing, global capabilities and
brand, and builds upon recent portfolio actions within our Safety
and Graphics business to position it for long-term success.”
Scott Safety’s products help protect firefighters, industrial
workers, police, military, homeland security forces, and rescue
teams around the world from environmental hazards. The business had
annual revenues in 2016 of approximately $570 million.
“Scott Safety is a recognized leader in the safety industry with
a portfolio of strong products, brands, and a talented team of
dedicated employees,” added Frank Little, executive vice president,
3M Safety and Graphics Business Group. “Combining 3M’s products,
brands and global capabilities in personal protective equipment
with Scott Safety’s well-regarded safety products will provide a
broader array of safety products and solutions, enhancing our
relevance to customers worldwide.”
3M’s Personal Safety Division provides respiratory, hearing, and
fall protection solutions that help improve the safety and health
of workers. The business also supplies products and solutions in
other safety categories such as reflective materials for
high-visibility apparel, protective clothing and head, eye, and
face protection.
On a GAAP reported basis, 3M estimates the acquisition to be
$0.10 dilutive to earnings in the first 12 months following
completion of the transaction. Excluding purchase accounting
adjustments and anticipated one-time expenses related to the
transaction and integration, 3M estimates the acquisition to be
$0.10 accretive to earnings over the same period.
The effective enterprise value multiple is approximately 11
times estimated annual adjusted EBITDA for the first 12 months
following completion of the transaction, including expected run
rate synergies.
The transaction is expected to close in the second half of 2017,
subject to customary closing conditions, regulatory approvals, and
information or consultation requirements with relevant works
councils. 3M will finance the transaction through a combination of
cash and debt.
Scott Safety employs approximately 1,500 people worldwide and is
headquartered in Monroe, N.C.
Citi and Goldman, Sachs & Co. acted as financial advisors to
3M and Cleary Gottlieb Steen & Hamilton LLP acted as legal
counsel to 3M.
Forward-Looking StatementsThis release contains
forward-looking information about 3M’s financial results and
estimates and business prospects that involve substantial risks and
uncertainties. You can identify these statements by the use of
words such as “anticipate,” “estimate,” “expect,” “aim,” “project,”
“intend,” “plan,” “believe,” “will,” “should,” “could,” “target,”
“forecast” and other words and terms of similar meaning in
connection with any discussion of future operating or financial
performance or business plans or prospects. Among the factors that
could cause actual results to differ materially are the following:
(1) worldwide economic, political, and capital markets conditions
and other factors beyond the Company’s control, including natural
and other disasters or climate change affecting the operations of
the Company or its customers and suppliers; (2) the Company’s
credit ratings and its cost of capital; (3) competitive conditions
and customer preferences; (4) foreign currency exchange rates and
fluctuations in those rates; (5) the timing and market acceptance
of new product offerings; (6) the availability and cost of
purchased components, compounds, raw materials and energy
(including oil and natural gas and their derivatives) due to
shortages, increased demand or supply interruptions (including
those caused by natural and other disasters and other events); (7)
the impact of acquisitions, strategic alliances, divestitures, and
other unusual events resulting from portfolio management actions
and other evolving business strategies, and possible organizational
restructuring; (8) generating fewer productivity improvements than
estimated; (9) unanticipated problems or delays with the phased
implementation of a global enterprise resource planning (ERP)
system, or security breaches and other disruptions to the Company’s
information technology infrastructure; (10) financial market risks
that may affect the Company’s funding obligations under defined
benefit pension and postretirement plans; (11) legal proceedings,
including significant developments that could occur in the legal
and regulatory proceedings described in the Company’s Annual Report
on Form 10-K for the year ended Dec. 31, 2016, and any subsequent
quarterly reports on Form 10-Q (the “Reports”), and (12) risks and
uncertainties related to the acquisition of Scott Safety, including
as to the satisfaction of closing conditions and the realization of
synergies from the transaction. Changes in such assumptions or
factors could produce significantly different results. A further
description of these factors is located in the Reports under
“Cautionary Note Concerning Factors That May Affect Future Results”
and “Risk Factors” in Part I, Items 1 and 1A (Annual Report) and in
Part I, Item 2 and Part II, Item 1A (Quarterly Reports). The
information contained in this release is as of the date indicated.
The Company assumes no obligation to update any forward-looking
statements contained in this release as a result of new information
or future events or developments.
About 3MAt 3M, we apply science in collaborative ways to
improve lives daily. With $30 billion in sales, our 90,000
employees connect with customers all around the world. Learn more
about 3M’s creative solutions to the world’s problems at www.3M.com
or on Twitter @3M or @3MNewsroom.
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3M Investor Contact:Bruce Jermeland, 651-733-1807or3M
Media Contact:Lori Anderson, 651-733-0831
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