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3M to pay $1.2 billion for Aearo
The Indianapolis maker of earplugs, face masks and goggles has posted strong sales growth in recent years.
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3M Co. said Thursday it will buy Aearo Technologies Inc., an Indianapolis eye, hearing and fall protection company, for $1.2 billion. The acquisition is 3M's largest since its $1.3 billion purchase of water filtration firm Cuno in 2005.
The deal, which will be completed using a mix of cash and debt, is expected to close during the first quarter. It will give 3M new earplug, face-mask and goggle products, 1,700 workers, and about $508 million a year in added revenue.
Aearo represents one of the largest in a string of deals that 3M has embarked on since CEO George Buckley came to the firm in December 2005. Most of those purchases have been of small companies that filled in holes in 3M's product, distribution or technology offerings.
Excluding the Aearo and Cuno deals, 3M in the last 23 months has bought 32 companies for a combined price of roughly $1.1 billion. The deals, which have focused mainly on safety, industrial and health care companies, helped add $340 million to third-quarter sales. Unlike Aearo, almost all of the recent acquisitions have been too small to require disclosure of their individual financial terms.
The purchases have included California-based Standard Abrasives; orthodontic firms Lingualcare Inc. in Dallas and Brazil-based Abzil Industria e Comercio Ltda.; the Polish metal grinder maker Unifam Sp. z o.o.; adhesive tape maker Venture Tape Corp. in Rockland, Mass.; Thailand-based wound care firm Neoplast, and optical passport reader firm Rochford Thompson Equipment Ltd.
CFO Patrick Campbell recently told analysts that 3M's "accelerated M&A activity ... has actually been a very good upside from a growth standpoint for many of our businesses."
3M plans to invest another $1 billion to $2 billion in acquisitions next year. That will leave room for more deals after the Aearo deal closes.
3M, which makes Scotch tape, sandpaper, bandages and LCD TV screen films, had $23 billion in revenue last year.
Aearo's sales have been growing about 12 percent a year.
Once the deal is finalized, Aearo will join 3M's $2.6 billion occupational health and environmental safety division, perhaps best known for its respirator mask products and anticorrosion products for pipes. Aearo also makes noise, vibration, shock and temperature-control products that are embedded in other manufacturers' products.
Aearo Technologies is owned by the private equity firm Permira, which bought the company 21 months ago from Bear Stearns Management for about $765 million.
3M's stock closed Thursday at $79.65, down 56 cents.
Dee DePass • 612-673-7725
Dee DePass • ddepass@startribune.com
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