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3M to Pay $860M to Acquire High-Tech Ceramics Maker

Ceradyne, which makes high-tech ceramics and reported $572 million in 2011 revenue, will join the energy and advanced materials division within 3M’s industrial and transportation business.

3M Company said Monday that it has agreed to pay $860 million to acquire Ceradyne, Inc.—a Costa Mesa, California-based company that makes high-tech ceramics.
 
Maplewood-based 3M has offered $35 per share, representing a 43 percent premium to Ceradyne’s closing stock price on Friday. However, Ceradyne’s stock price soared on news of the acquisition, and shares were trading at $34.92 mid-day Monday.
 
Ceradyne develops and produces advanced technical ceramics that are used in the automotive, oil and gas, solar, industrial, electronics, and defense industries. Its 2011 revenue totaled $572 million.
 
The acquisition is expected to close in the fourth quarter of this year. Ceradyne’s shareholders have yet to approve the sale, but the company’s board of directors has unanimously recommended that they do so; the sale is also subject to other customary closing conditions.
 
3M said that Ceradyne will join the energy and advanced materials division within its industrial and transportation business. The division provides lightweight materials and materials made to perform in harsh environments to customers in a wide variety of industries.
 
“Ceradyne is a strong company with a great reputation, world-class technology in advanced ceramics, and leadership positions in the markets it serves,” 3M industrial and transportation business Executive Vice President Chris Holmes said in a prepared statement. “Ceradyne is an excellent complement to our existing businesses in transportation, energy markets, and defense.”
 
Ceradyne was founded in 1867. Among the items that its ceramics are used in: military armor, boats, naval vessels, helicopters, and fixed-wing aircraft; fuel-pump components; and electronic parts.
 
“3M is renowned for its innovation, its R&D, and its global reach,” Ceradyne CEO Joel Moskowitz said in a prepared statement. “This is a great fit, and I know that advanced ceramics technologies have a tremendous future within 3M and can contribute to the development of unique solutions for many demanding applications.”
 
3M is among Minnesota’s five largest public companies based on revenue, which totaled $29.6 billion in 2011.