In a surprise move, 3M Co. said Friday that it will sell HighJump Software this quarter, just five years after acquiring the firm that gave 3M a leg up on its warehouse tracking and radio-frequency identification (RFID) technology.
Private equity firm Battery Ventures is buying HighJump for an undisclosed price, and plans to turn the division into a "standalone company focused on providing supply-chain solutions to a global customer base," 3M officials said.
Eden Prairie-based HighJump, with 350 employees, had become a linchpin in 3M's exploding "track-and-trace" business, one that 3M CEO George Buckley has identified as a growth engine.
3M paid about $90 million in 2003 to buy out HighJump CEO and founder Chris Heim, CFO Dan Mayleben and key investors St. Paul Venture Capital and Gemini Partners. HighJump grew steadily, from $34 million in annual sales to more than $90 million, on warehouse- and inventory-management contracts with the likes of Aveda's global warehouse in Blaine, International Paper and several top suppliers to Wal-Mart Stores Inc.
HighJump's 1,300 customers include heavyweights American Port Services, Circuit City, Starbucks, Honeywell, Sony, Toro and Kimberly-Clark.
HighJump will focus on warehouse and inventory-tracking software, while 3M steers toward different uses for its RFID business, 3M officials said.
Lemuel Amen, 3M's track-and-trace manager, said the company is refining its approach to provide comprehensive tracking products for "high-value assets and people that deliver customer value through asset utilization, safety and security."
He said that HighJump should do better with Battery Ventures.
Since acquiring HighJump, 3M has gone on to develop numerous track-and-trace technology applications for Army medical records, passport tracking and authentication, and underground wire and pipe identification products.
3M will also focus on marketing RFID bracelets and tracking devices for newborns, vulnerable hospital patients, doctors, underground miners, valuable equipment and books and records that companies, law firms and hospitals might need to find quickly, 3M spokeswoman Donna Fleming Runyon said.
Still, the sale surprised some analysts, who noted that HighJump had built a significant software business, with warehouse clients worldwide.
3M stock fell 63 cents, to $76.32 on Friday.
In other business, 3M said Friday that it will buy Quest Technologies Inc., a manufacturer of environment-monitoring equipment, including noise, heat-stress and vibration monitors. Terms were not disclosed.
Dee DePass • 612-673-7725