Acquisition Expands 3M's Presence in Fast-Growing Personal Protective
ST. PAUL, Minn.--(BUSINESS WIRE)--
3M announced today that it has entered into a definitive agreement to
acquire Capital Safety from KKR for a total enterprise value of $2.5
billion, including the assumption of approximately $0.7 billion of debt,
net of cash acquired. Capital Safety is a leading global provider of
fall protection equipment, one of the fastest-growing safety categories
within the global personal protective equipment industry.
The personal protective equipment industry is a strategic priority for
3M. Demand for personal protective equipment is rapidly growing, driven
by increasing regulatory focus on worker safety across both developed
and developing countries.
Capital Safety's industry-leading products and solutions include
harnesses, lanyards, self-retracting lifelines and engineered systems
sold under well-known global brands DBI-SALA and PROTECTA. The company
has demonstrated strong and consistent growth with sales increasing at a
compound annual growth rate of 10 percent over the past four years. The
company's sales, adjusted to include recent acquisitions on a full-year
basis, were approximately $430 million for its fiscal year ended March
3M's Personal Safety business, part of 3M's Safety and Graphics Business
Group, is a global provider of respiratory and hearing protection
solutions that help improve the safety and security of workers. The
business also supplies products and solutions in other safety categories
such as reflective materials for high-visibility apparel, protective
clothing and eyewear, among others.
"Personal safety is a large and strategically important growth business
in the 3M portfolio," said Inge G. Thulin, 3M chairman, president and
chief executive officer. "The acquisition of Capital Safety bolsters our
personal safety platform and will build on our fundamental strengths in
technology, manufacturing, global capabilities and brand."
"Capital Safety is a tremendous business with a strong reputation in the
safety industry and a talented team of dedicated employees," added Frank
Little, executive vice president, 3M Safety and Graphics Business Group.
"3M's brand in personal protective equipment, combined with our global
capability, will provide a broader array of products and solutions to
both Capital Safety's and 3M's customers."
The business employs approximately 1,500 people worldwide and is
headquartered in Bloomington, Minn.
"We have had an absolutely fantastic partnership with the management and
employees of Capital Safety. Over the past three years, the company has
driven impressive top-line growth, broadened its geographic presence and
further optimized its operations. Today, Capital Safety is a clear
global leader in fall protection," Pete Stavros, member of KKR and head
of the Industrials team, said. "3M is a perfect home for a company and
team that is so deeply committed to safety."
"This is a great strategic fit and provides Capital Safety and its
employees with a strong platform for future growth," said Stephen
Oswald, chief executive officer, Capital Safety. "Each company also
highly values innovation and this will enable us to drive further
product development and provide a broader array of solutions to both
Capital Safety and 3M customers."
On a GAAP reported basis, 3M estimates the acquisition to be $0.04
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 $0.12 accretive to earnings over the
The effective enterprise value multiple is approximately 14 times annual
adjusted EBITDA for the first 12 months following the completion of the
The transaction is expected to close in the third quarter, subject to
customary closing conditions and regulatory approvals. 3M will finance
the transaction with existing cash, a portion of which will come from
outside the U.S.
Morgan Stanley acted as the exclusive financial advisor to 3M. Goldman,
Sachs & Co. acted as the exclusive financial advisor to KKR.
DBI-SALA and PROTECTA are registered trademarks of Capital
This news release contains forward-looking information about 3M's
financial results and estimates and business prospects that involve
substantial risks and uncertainties. You can identify these statements
by the use of words such as "anticipate," "estimate," "expect," "aim,"
"project," "intend," "plan," "believe," "will," "should," "could,"
"target," "forecast" and other words and terms of similar meaning in
connection with any discussion of future operating or financial
performance or business plans or prospects. Among the factors that could
cause actual results to differ materially are the following: (1)
worldwide economic and capital markets conditions and other factors
beyond the Company's control, including natural and other disasters
affecting the operations of the Company or its customers and suppliers;
(2) the Company's credit ratings and its cost of capital; (3)
competitive conditions and customer preferences; (4) foreign currency
exchange rates and fluctuations in those rates; (5) the timing and
market acceptance of new product offerings; (6) the availability and
cost of purchased components, compounds, raw materials and energy
(including oil and natural gas and their derivatives) due to shortages,
increased demand or supply interruptions (including those caused by
natural and other disasters and other events); (7) the impact of
acquisitions, strategic alliances, divestitures, and other unusual
events resulting from portfolio management actions and other evolving
business strategies, and possible organizational restructuring; (8)
generating fewer productivity improvements than estimated; (9)
unanticipated problems or delays with the phased implementation of a
global enterprise resource planning (ERP) system, or security breaches
and other disruptions to the Company's information technology
infrastructure; and (10) legal proceedings, including significant
developments that could occur in the legal and regulatory proceedings
described in the Company's Annual Report on Form 10-K for the year ended
December 31, 2014, and its subsequent quarterly reports on Form 10-Q
(the "Reports"). Changes in such assumptions or factors could produce
significantly different results. A further description of these factors
is located in the Reports under "Cautionary Note Concerning Factors That
May Affect Future Results" and "Risk Factors" in Part I, Items 1 and 1A
(Annual Report) and in Part I, Item 2 and Part II, Item 1A (Quarterly
Report). The information contained in this news release is as of the
date indicated. The Company assumes no obligation to update any
forward-looking statements contained in this news release as a result of
new information or future events or developments.
KKR is a leading global investment firm that manages investments across
multiple asset classes including private equity, energy, infrastructure,
real estate, credit and hedge funds. KKR aims to generate attractive
investment returns by following a patient and disciplined investment
approach, employing world-class people, and driving growth and value
creation at the asset level. KKR invests its own capital alongside its
partners' capital and brings opportunities to others through its capital
markets business. References to KKR's investments may include the
activities of its sponsored funds. For additional information about KKR
& Co. L.P. (NYSE:KKR), please visit KKR's website at www.kkr.com.
About Capital Safety
Capital Safety, a global leader in fall protection with 27 operating
sites worldwide, is home of the DBI-SALA and PROTECTA brands.
All of Capital Safety's fall protection equipment and services are
backed by extensive training, knowledgeable technical assistance and
professional customer service. For more information, contact Capital
Safety at 800-328-6146 or visit www.capitalsafety.com.
At 3M, we apply science in collaborative ways to improve lives daily.
With $32 billion in sales, our 90,000 employees connect with customers
all around the world. Learn more about 3M's creative solutions to the
world's problems at www.3M.com
or on Twitter @3M or @3MNewsroom.
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Lori Anderson, 651-733-0831
Director of Communications, Americas
Bruce Jermeland, 651-733-1807
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