3M Embarks on $2 Billion Buying Spree

In the span of only a few months, the Maplewood-based company announced plans for investments and acquisitions that together exceed $2 billion-and it has set aside between $2 billion and $3 billion for mergers and acquisitions in 2011.

While Minnesota's public companies have made some significant acquisitions this year, the quantity, cost, and pace of 3M's deals are particularly notable.

According to company spokeswoman Donna Fleming Runyon, 3M closed on 60 deals between 2005 and 2009. And although the company made only four acquisitions in 2009, this year's buying spree adds 11 more to the ongoing tally.

3M purchased a handful of businesses in the first half of 2010-including aerospace company MTI PolyFab, Inc.; Canadian manufacturer J.R. Phoenix, Ltd.; and Dailys, Ltd., a supplier of disposable protective clothing.

But it wasn't until the second half of the year that the Maplewood-based company went on a buying spree. In fact, in the span of only a few months, 3M announced plans to buy or invest in companies in deals that were together valued at more than $2 billion.

The string of acquisitions really took off in late August when 3M announced plans to buy biometric identification solutions provider Cogent, Inc., in a deal valued at $943 million. That takeover, structured as a tender offer, received some backlash from shareholders who filed a suit asking that the sale be blocked-a request that the Delaware Chancery Court denied in October.

By late October, 3M was unable to acquire the necessary amount of Cogent's outstanding shares through its tender offer, forcing it to use a Cogent shareholders vote to obtain the remaining shares.

On December 1, the company finally completed the Cogent acquisition, making Cogent a wholly-owned subsidiary of 3M.

The day after its initial August announcement about Cogent, 3M said that it agreed to pay $230 million in cash to acquire Israel-based Attenti Holdings, S.A., which supplies remote people-monitoring technologies. 3M said at the time that the acquisition will position it as a leader in the electronic offender-monitoring market and will add GPS and active radio-frequency technology to its portfolio.

The shopping streak kept heating up as 3M announced one week later plans to buy Arizant, Inc., an Eden Prairie-based manufacturer, for $810 million. Arizant manufactures products designed to warm patients in surgical settings in order to prevent hypothermia.

October brought a stream of additional acquisitions, starting with Taiwan-based tape company Alpha Beta Enterprise Company, Ltd.. The financial terms of that deal were not disclosed.

Within a few days, 3M was touting another significant expenditure-this time investing through its New Ventures business an undisclosed sum in New York-based Perceptive Pixel, Inc., a developer of advanced multi-touch solutions.

Still in October, 3M's venture-capital arm also invested an unspecified amount in Germany-based printed electronics firm Printechnologics.

Following a brief lull, 3M was back at the buying table. In early December, the company shared plans to acquire Winterthur, a Swiss supplier of precision grinding technology, for about $448 million.

In all, 3M closed 11 deals in 2010, and two remaining transactions-for the purchase of Alpha Beta and Winterthur-are expected to close in the first quarter of 2011.

At the company's 2011 outlook meeting, which was held on December 7, Senior Vice President and Chief Financial Officer Pat Campbell's presentation included a breakdown of the company's capital allocation for the coming year. The company expects to spend between about $2 billion and $3 billion on mergers and acquisitions activity in 2011-and that figure includes the deals expected to close in the first quarter.