3M Co. has agreed to sell the assets of its $20 million pressurized foam adhesives business to Innovative Chemical Products Group for an undisclosed price, the company said Wednesday.
The sale is 3M's fourth divestiture in recent months. Coming on the heels of two massive acquisitions last year, officials say they are focusing on "core businesses" and are willing to let go others that fall outside targeted areas.
3M's Pressurized Polyurethane Foam Adhesives business supplies foam adhesives and forms to roofing, insulation and industrial firms. It has operations in Tomball, Texas, and Coral Springs, Fla. The buyer, which is owned by Audax Private Equity and based in Massachusetts, expects to maintain those operations.
Three weeks ago, 3M sold its Static Control business to Desco Industries Inc. for an undisclosed price. The electric charge protection unit generated about $45 million in annual sales for 3M.
In October, the Maplewood-based conglomerate sold its global library systems business, which created $100 million a year in revenue, to One Equity Partners Capital Advisors. 3M that month also sold its French-based Faab Fabricauto sign and license-plate fabricator.
A fifth divestiture is likely coming. 3M — which will announce fourth-quarter and full-year earnings on Tuesday — announced in September that it was "exploring strategic alternatives" for its large and well-regarded health information systems business.
"We just want to make sure that we're maximizing the value opportunity potential from this business," Chief Financial Officer Nick Gangestad said during a meeting last month. A decision is expected by the end of the first quarter.
Analysts noted that 3M's division sales and the exploration of strategic alternatives come on the heels of some pricey acquisitions and during times when industrial growth is slowing worldwide. Selling noncore businesses is common practice and brings in a jolt of money that can help pay for 3M's big spends, they said.
While 3M is historically known for its wealth of adhesive products, "this small sale is not likely reflective of any major change in the fit of adhesives into 3M's portfolio more broadly," said Matt Arnold, an analyst with Edward Jones. "We would look at it as more of a 'bottom up' evaluation of product lines that may not be of importance strategically anymore."
After years of tiny or no deals, 3M spent $2.5 billion in June to buy protective equipment maker Capital Safety, based in Bloomington. In August, the company spent $1 billion on Polypore's ultra-filtration "Separations Media" business.
3M CEO Inge Thulin told analysts last month that "these deals will enhance two of 3M's core platforms, personal safety and filtration."
In respect to selling other businesses, "ultimately, we determine that selling these businesses will result in the greatest value creation for our company," Thulin said.
The company's stock fell 1 percent to close at $136.96 Wednesday.