3M Company has agreed to acquire Scott Safety from Johnson Controls for $2 billion, in a deal that would make 3M the largest personal protection equipment maker in the nation, according to company officials.
The deal will be the second largest acquisition for the Maplewood-based 3M conglomerate and will greatly expand its worker safety product offerings, especially in breathing and gas detection devices.
If the deal is completed in the second half of the year as expected, the North Carolina-based Scott Safety will add 1,500 employees and $570 million in annual revenue to 3M’s coffers.
The news was welcomed by industry analysts, who noted that 3M has worked hard to expand its worker safety products. In its largest deal to date, 3M bought Capital Safety for $2.5 billion 19 months ago to gain a huge presence in the fall protection and worker-harness arena.
Now, it’s greatly expanding its firefighter breathing products by buying Scott Safety.
Scott is one of the world’s leading manufacturers of self-contained breathing apparatus systems; gas and flame detection instruments; and other safety devices. Its products are largely used by firefighters, industrial workers, police, military, homeland security forces, and rescue teams who need reliable protection from environmental, dust and smoke hazards.
The products are expected to complement 3M’s personal safety portfolio, which now includes respirators and welding masks as well as eye, ear and fall protection equipment.
3M CEO Inge Thulin praised the Scott Safety acquisition and said it is expected to contribute about 10 cents per share to 3M earnings after initial acquisition costs are factored out.
“Personal safety is a core growth business within the 3M portfolio,” says Thulin. “This acquisition leverages our fundamental strengths in technology, manufacturing, global capabilities and brand, and builds upon recent portfolio actions within our Safety and Graphics business to position it for long-term success.”
Frank Little, executive vice-president of 3M Safety and Graphics Business Group, will oversee the soon to be acquired unit.
3M’s larger Safety and Graphics Business Group now has about $5.5 billion in annual revenue. Prior to the Scott Safety news, Little, Thulin and other executives had forecasted Safety and Graphics to grow about one to three per cent per year through 2020. Analysts said 3M’s newest acquisition could increase such growth opportunities, as 3M and Scott talents are combined to introduce new products, cross-sell between existing customer sets, and eliminate redundant expenses.