3M to acquire medical device maker Acelity in a $6.7 billion deal
Category: #health  By Paroma Bhattacharya  Date: 2019-05-04
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3M to acquire medical device maker Acelity in a $6.7 billion deal

3M Co has reportedly announced it would acquire Acelity Inc, a privately-owned medical device maker, in a $6.7 billion deal, including debt, as the U.S. industrial multinational looks to expand in medical dressings and related products.

As per trusted sources, 3M is buying the firm and some of its units from a group of funds recommended by Apax Partners, Public Sector Pension Investment Board, and the partners of Canada Pension Plan Investment Board.

For the uninitiated, Acelity’s KCI brand manufactures advanced wound dressings and specialized systems that use a vacuum to seal off chronic or acute wounds, accelerating healing.
The firm registered returns worth $1.5 billion in 2018, around 80 percent of which were derived from sales of such specialized systems that offer negative pressure wound therapy, claimed sources.

According to 3M, the acquisition would augment its standing in the advanced wound care business sphere, which is valued over $8 billion and is witnessing growth at a rate of 4 to 6 percent per annum.
The acquisition price values Acelity at 15 times its adjusted EBITDA in 2018, the company added.

After the deal, that is projected to close in the second half of 2019, Acelity will be a part of 3M’s medical solutions business that produces sterilization products, medical tapes, and acute wound care dressing products. Apart from one-time expenses, 3M anticipates the deal to add 25 cents per share to its revenue within the first year following the deal finalization, reported an executive for 3M.

The company also projects the full-year 2019 share buyback program to fall in the range of $1.0 billion to $1.5 billion, in comparison to a previous range of $2.0 billion to $4.0 billion, 3M executive said.

Post the announcement, 3M’s stock dropped about 1 percent at $184.23 before the bell, reported sources.

Source Credits: https://www.reuters.com/article/us-acelity-m-a-3m/3m-to-buy-medical-device-maker-acelity-in-67-billion-deal-idUSKCN1S80U9



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Paroma Bhattacharya

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Paroma Bhattacharya

Paroma currently works as a content developer for Algosonline, MSF and a series of alike platforms. Fortified with a post-graduation degree in Journalism and Mass Communication, she delved head long into a writing career, creating resourceful and information enriched ...

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