3M Co. has agreed to acquire Scott Safety from Johnson Controls for $2 billion in a deal that would make 3M the largest personal protection equipment maker in the nation.
The deal announced Thursday will be the second largest acquisition in Maplewood-based 3M’s history and will greatly expand its worker safety product offerings, especially in breathing and gas detection devices.
If the deal is completed in the second half of the year as expected, the North Carolina-based Scott Safety will add 1,500 employees and $570 million in annual revenue to 3M’s coffers.
The news was welcomed by industry analysts who noted that 3M has worked hard to expand its worker safety products. In its largest deal to date, 3M bought Capital Safety for $2.5 billion 19 months ago to gain a huge presence in the fall protection and worker-harness arena.
Now, it’s greatly expanding its firefighter breathing products by buying Scott Safety.
Scott is one of the world’s leading manufacturers of self-contained breathing apparatus systems, gas and flame detection instruments and other safety devices. Its products are largely used by firefighters, military and rescue teams who need reliable protection from environmental, dust and smoke hazards.
The products are expected to complement 3M’s personal safety portfolio, which now includes respirators and welding masks as well as eye, ear and fall protection equipment.
“This will help them greatly,” said Sanjiv Bhaskar, vice president of research for Frost and Sullivan. “3M has some gaps in its safety portfolio. This fills a big gap and gives them some high-tech safety products. It will give them the types of safety products that cater to firefighters, oil and mining industries, where breathing and gas detection are critical. So this is good for 3M. It propels them to the No. 1 spot in the PPE [personal protection equipment] industry.”
The Capital Safety and Scott Safety deals add $1 billion to 3M’s annual revenue, Bhaskar said.
3M CEO Inge Thulin praised the Scott Safety acquisition Thursday and said it is expected to contribute about 10 cents a share to 3M earnings after initial acquisition costs are factored out.
“Personal safety is a core growth business within the 3M portfolio,” Thulin said. “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.”
Frank Little, executive vice president of 3M’s Safety and Graphics business group, will oversee the soon to be acquired unit.
“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,” he said.
3M’s larger Safety and Graphics business group now has about $5.5 billion in annual revenue. Before the Scott Safety news, Little, Thulin and other executives had forecast Safety and Graphics to grow about 1 to 3 percent a year through 2020.
Analysts said 3M’s newest acquisition could increase such growth opportunities as 3M and Scott talents are combined to introduce new products, cross-sell between existing customer sets and eliminate redundant expenses.
3M’s stock closed at $190.31, down 89 cents.