3M To Buy Scott Safety For $2B, Its Second-Largest Acquisition Ever
In its second-largest acquisition ever, 3M announced on Thursday that it would buy Scott Safety, a manufacturer of protective devices such as breathing apparatus systems and gas and flame detection instruments, for approximately $2 billion.
The deal is financed through a mix of cash and debt, Maplewood-based 3M said. It expects the deal to close in the second half of this year, subject to customary closing conditions and regulatory approvals.
If approved, 3M said it would role Scott Safety’s product line into its personal safety portfolio, a growing business unit within its larger safety and graphics division.
“This acquisition leverages our fundamental strength in technology, manufacturing, global capabilities and brand,” 3M CEO Inge Thulin said in a statement. He added that the addition of Scotty Safety would “build upon recent portfolio actions within our Safety and Graphics business to position it for long-term success.”
3M’s largest-ever acquisition was also in the personal safety realm. In June 2015, it paid $2.5 billion for Capital Safety, a Bloomington-based maker of construction gear, seatbelts and harnesses. That company was said to have added 1,500 employees and annual sales of $430 million.
Scott Safety could bring an even bigger impact to 3M’s bottom line.
Monroe, North Carolina-based Scott Safety, which is owned by Milwaukee-based Johnson Controls, reported annual sales in 2016 of $570 million. The company similarly employed 1,500 people worldwide.
With the addition of Scott Safety, the annual revenue of 3M’s Safety and Graphics division could grow to $6.23 billion.
“Scott Safety is a recognized leader in the safety industry with a portfolio of strong products, brands, and a talented team of dedicated employees,” Frank Little, executive vice president of 3M’s Safety and Graphics business group, said in a statement. “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 estimated the acquisition would be 10 cents dilutive to earnings in the first 12 months. For the next 12 months after that, it expects it to be 10 cents accretive.
Since the deal’s announcement, 3M stock has fallen about $1 from its Wednesday close of $191.20.