logo
Share SHARE
FONT-SIZE Plus   Neg

3M To Buy Scott Safety From Johnson Controls For Enterprise Value Of $2.0 Bln

3M (MMM) said that it agreed to acquire Scott Safety from Johnson Controls for a total enterprise value of $2.0 billion.

Scott Safety is a premier manufacturer of innovative products, including self-contained breathing apparatus or SCBA systems, gas and flame detection instruments, and other safety devices that complement 3M's personal safety portfolio.

Scott Safety's products help protect firefighters, industrial workers, police, military, homeland security forces, and rescue teams around the world from environmental hazards. The business had annual revenues in 2016 of approximately $570 million.

On a GAAP reported basis, 3M estimates the acquisition to be $0.10 dilutive to earnings in the first 12 months following completion of the transaction. Excluding purchase accounting adjustments and anticipated one-time expenses related to the transaction and integration, 3M estimates the acquisition to be $0.10 accretive to earnings over the same period.

The effective enterprise value multiple is approximately 11 times estimated annual adjusted EBITDA for the first 12 months following completion of the transaction, including expected run rate synergies.

The transaction is expected to close in the second half of 2017, subject to customary closing conditions, regulatory approvals, and information or consultation requirements with relevant works councils. 3M will finance the transaction through a combination of cash and debt.

Scott Safety employs about 1,500 people worldwide and is headquartered in Monroe, N.C.

Separately, Johnson Controls said it plans to offset dilution from the transaction, including increasing its share repurchase program during the remainder of fiscal 2017, and will provide additional details during the quarterly earnings call to be held in April.

Johnson Controls noted that it expects net cash proceeds from the transaction to be about $1.8 billion to $1.9 billion, and will be used to repay a portion of Tyco International Holding Sarl's $4.0 billion of merger related debt.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Quick Facts

Editors Pick
Amazon would reportedly sell Google's Chromecast streaming adapter for this Christmas. The online retailer giant has banned the product from its site for the last two years and has presumably settle the issues. Though the product is not available for sale, it has listed 4K-capable Chromecast Ultra adapter. Europe's no-frills airline Ryanair recognized pilot union for a smooth holiday season ahead. The airline had a discussion with its pilots union in Britain, Germany, Italy, Spain, Ireland, Portugal to iron out the issues. The pilots working for Ryanair have been enjoying different status and many of them were reportedly not in the rolls as full timers. Shares of Hennes & Mauritz AB or H&M were plunging around 13 percent in Sweden after the retailer reported lower sales in its fourth quarter with weakness in H&M brand's physical stores. However, H&M brand's online sales and sales of the group's other brands continued to develop well, the company said.
comments powered by Disqus
Follow RTT