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
Neste will provide Avfuel with SAF in volumes able to meet the growing demands of Avfuel’s customers, including fixed base operators (FBOs), airports, flight departments, original equipment manufacturers (OEMs) and commercial operators.
Operation of the plant is a joint enterprise between Borealis, TOMRA and Zimmermann. Borealis is responsible for the plant’s commercial success and contributes its expertise and knowledge in innovation, recycling and compounding.
Johnson Matthey announces that Stephen Oxley will join the company’s board on 1st April 2021 as Chief Financial Officer (CFO).
