3M Expands in Health Care With $6.7 Billion Deal Including Debt

(Bloomberg) -- 3M Co. agreed to acquire closely held Acelity Inc. from a group of funds advised by Apax Partners for about $6.7 billion including debt, expanding the company’s medical-products portfolio.

Key Insights

• The acquisition of the maker of post-surgical wound products shifts focus away from 3M’s rocky recent performance. The shares logged the worst one-day loss in 31 years last week after the company cut its annual profit forecast and reported quarterly results that missed Wall Street estimates.
• The deal will prompt the maker of Post-it notes and touchscreen displays to conserve cash, pegging its planned share repurchases this year to between $1 billion and $1.5 billion. It previously had planned as much as $4 billion in buybacks.
• The sizable deal reflects a more aggressive approach on acquisitions. 3M’s previous biggest purchase was of Capital Safety North America in 2015 for $2.5 billion, though that value doesn’t include debt.

Market Reaction

• The stock fell less than 1 percent to $184.50 before the start of regular trading in New York. 3M had declined 2.3 percent this year through Wednesday, while the Dow Jones Industrials Average climbed 13 percent.

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