3M’s rumored divestiture of most of its drug-delivery business became a reality on 12 December, but the haul was far less than the one billion dollars that Bloomberg put out there earlier in the week.
The St. Paul, MN–based conglomerate entered into an agreement to sell substantially all of its drug-delivery business to an affiliate of Altaris Capital Partners LLC (New York) for approximately $650 million in total consideration, including cash, an interest-bearing security and a 17% non-controlling interest in the new company.
The 3M business is a global leader in drug delivery that partners with pharmaceutical and biotech companies to develop and manufacture pharmaceutical products using inhalation, transdermal, micro-needle and conventional drug-delivery technologies. 3M will retain its transdermal drug delivery components business. The business that is being divested has annual global sales of approximately $380 million.
“The drug delivery business is a leading provider of transdermal and inhalation delivery technologies,” said Michael Roman, 3M Chairman and CEO in a prepared statement. “This transaction will allow us to focus more resources on our core healthcare business as well as retain a share in the value of the drug-delivery business as it grows over the coming years.”
Buying and selling companies is more or less a core business activity of companies organized like 3M, writes Lee Schafer in the Minneapolis-based Star Tribune. In October, 3M paid approximately $6.7 billion, including assumption of debt, to acquire Acelity, which specializes in advanced wound-care and surgical products under the KCI brand. Although 3M has taken a hit on the stock market this year, declining about 19%, according to Bloomberg, the $33 billion company doesn’t need the money from the sale, writes Schafer. “It had $1.7 billion of free cash flow just in its most recent full quarter.”
So why sell a business that is a solid performer? “It could be as simple as it’s worth more to somebody else,” opines Shafer. “The buyer gets a business that’s worth more to them. The seller gets to take the money from the sale and invest it in opportunities that generate higher returns,” he writes. The proverbial win-win.
The transaction is subject to customary closing conditions and regulatory approvals. 3M said that it expects to close on the deal in the first half of 2020.
By Norbert Sparrow
Source: Plastics Today
We are closing the chapter of the Chemicals Import Export Headquarters, and opening a new chapter under the name of Qemetica – a chemical group driving many industries on all continents. Therefore, the change of name is also accompanied by the adoption of the key goals of the business strategy for the next 6 years. – says Kamil Majczak, President of the Management Board.
In its efforts to advance chemical recycling, Neste has successfully conducted its first processing trial run with a new challenging raw material, liquefied discarded tires. In the processing run, Neste produced high-quality raw material for new plastics and chemicals.
Sika is opening a state-of-the-art facility in Lima, Peru, to produce synthetic macro fibers, and expanding the rollout of a product range with great growth potential in Latin America. With this innovative technology, Sika is further strengthening its position as a leading supplier to the mining industry and a strong partner for infrastructure projects.
