3M Acquires Acelity Wound Products Manufacturer Under $ 6.7 Billion Contract

3M announced on Thursday that it would be acquiring a manufacturer of wound treatment products for about $ 6.7 billion, including net debt, while the industry group had announced last month its intention to remove jobs as part of a restructuring.

The Minnesota-based company will finance the transaction with a combination of available cash and proceeds from the issuance of a new debt.

The conglomerate behind everything from post-it notes to industrial products, decided to acquire Acelity and its KCI affiliates – which make up a wide range of wound care products. 3M buys the group from a consortium of funds advised by the Apax Partners buyback group alongside affiliates of the Canada Pension Plan Investment Board and the Board of Directors. investment of public sector pension schemes.

"Acelity is a leading provider of advanced wound care technologies and solutions and an excellent complement to our healthcare industry," said Mike Roman, President and CEO of 3M.

The company expects the agreement to generate dilutive earnings per share of 35 cents in the first 12 months following the completion of the transaction, including transaction costs. Excluding non-recurring transaction costs, 3M expects the transaction to generate earnings per share of 25 cents over the same period.

As a result of the transaction, 3M has reduced its share buyback program to $ 1 billion to $ 1.5 billion from $ 2 billion to $ 4 billion. Acelity generated revenues of $ 1.5 billion in 2018.

The news of the acquisition comes after 3M last month announced the elimination of 2,000 jobs worldwide as part of a restructuring and a reduction in its profit forecasts for the year. The company recently realigned its portfolio into four out of five business groups, with the goal of improving productivity, reducing costs and increasing cash flow.

The transaction, which is subject to regulatory approval, is expected to be finalized in the second half of the year.

Credit Suisse acted as financial advisor to 3M. Cleary Gottlieb Steen & Hamilton LLP acted as counsel to 3M.