3M Co. has agreed to sell its electronic monitoring business to the private equity advisory firm Apax Partners for $200 million, one of several divestitures being made to improve the company’s overall portfolio.
3M’s electronic monitoring business generates about $95 million in revenue a year providing electronic monitoring technologies to hundreds of correctional and law enforcement agencies around the world, the company said on Thursday.
About 265 3M employees who support the electronic monitoring business are expected to transfer to Apax after the sale closes. The transaction is expected to close in the third quarter of this year, provided regulatory approvals are received as expected, officials said.
“This divestiture is one of several actions we have taken to improve our portfolio,” said John Riccardi, vice president and general manager of 3M’s Transportation Safety Division. “We are focusing on the rapidly changing trends in transportation safety and mobility, which include the connected roadways of the future.”
The electronic monitoring business is one of several noncore divisions 3M has sold in recent years as it refocuses its energies on higher-growth and higher-margin businesses.
In December, 3M announced that it would sell the identity management business that is behind most U.S. passport readers to a Dutch company for $850 million. In the past two years, it also sold its $20 million pressurized foam adhesives business, its French license plate making business and its $100 million library systems unit.
3M’s division divestitures come at the same time the company has been pouring money into sizable acquisitions.
In March, 3M announced that it would spend $2 billion to buy Scott Safety. That deal follows 3M’s largest purchase to date, the $2.5 billion acquisition of Capital Safety in 2015. 3M CEO Inge Thulin has said previously that the Maplewood-based maker of Scotch tape, Post-it notes, respirators and hearing protection headsets is constantly re-evaluating its portfolio to ensure it is well-positioned in high-growth areas and exiting areas that no longer have the potential to boost margins or markets.
3M’s stock price fell 12 cents a share Thursday to close at $204.35 per share but is still trading at a five-year high.