3M to buy Swiss abrasives firm for $448 million

3M Co. Monday delivered on its forecast to make more than $2 billion in acquisitions this year, announcing a deal to bolster its product line in abrasives -- the business that gave the company its start more than 100 years ago.

The Maplewood-based giant said it will pay $448 million to acquire Winterthur Technologies AG, a publicly traded Swiss company that makes precision grinding tools. The Swiss company's board has unanimously recommended the offer to stockholders, and Winterthur Chairman Edgar Rappold already has agreed to tender his 14 percent stake in the firm.

3M said it doesn't expect to complete the Winterthur acquisition until the first quarter of 2011, but the deal puts 3M over the $2 billion mark in terms of transactions announced this year. In August, CEO George Buckley said acquisitions would top $2 billion, double what it had forecast earlier this year.

Buckley's August remarks came just before a flurry of announced deals -- the $943 million acquisition of Cogent Inc., a Pasadena manufacturer of fingerprint-identification systems; the $230 million acquisition of Attenti Holdings SA, an Israeli company that makes electronic tracking devices, and the $810 million acquisition of Arizant, Inc., an Eden Prairie maker of blankets and fluid warming systems to prevent hypothermia in surgical patients.

In October 3M added another, announcing plans to acquire the tape business of Taiwan firm Alpha Beta Enterprise Co. for an undisclosed amount.

Like Alpha Beta, the Winterthur deal reflects 3M's interest in adding to businesses that make up its foundation. 3M got its start in 1902 in Two Harbors, Minn., by five businessmen interested in mining a mineral deposit for grinding-wheel abrasives. Those plans didn't pan out, and the then-fledgling business moved to Duluth in 1905 to focus on sandpaper products.

Jeff Windau, an analyst at Edward Jones in St. Louis, said the Winterthur deal complements 3M's other recent acquisitions in some faster-growing businesses like health care and safety and security. "It also demonstrates the company's continued emphasis on expanding their global reach," he said. Winterthur has about 1,300 employees around the world and its products are sold in Europe, Asia and North and South America.

Winterthur, a supplier to industrial, automotive and aircraft markets, has recently achieved some impressive growth of its own. After tumbling about 37 percent in 2009, the company's sales of about $114 million for the first half of 2010 were up more than 30 percent from the same period a year earlier. The company attributed the increase to rising demand for hard-to-grind and high-precision materials needed for improved grinding and finishing processes.

"Adding Winterthur enhances and extends our existing product line, enabling us to provide solutions for a broader range of industrial grinding and finishing needs," said Chris Holmes, vice president of 3M's abrasive systems division.

3M shares closed Monday at $86.88, down six cents. The decline of 0.07 percent was less than the 0.17 percent dip in the Dow Jones industrial average, of which it is a component.