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TheStreet Open House

3M Buys Arizant for $810 Million

Stocks in this article: MMM


NEW YORK ( TheStreet) -- 3M (MMM) said Thursday that it has agreed to buy Arizant, a maker of surgical patient temperature management systems, for $810 million in cash as the conglomerate continues expands its infection prevention offerings and continues to drive its growth internationally.

On a GAAP reported basis, 3M estimates the acquisition to be 3 cents dilutive to earnings in the first 12 months following the completion of the transaction. Excluding integration expenses and certain accounting adjustments, 3M estimates the acquisition to be neutral to earnings over the same period.

First year EBITDA (earnings before interest, taxes, depreciation and amortization), excluding purchase accounting and integration costs, is expected to be about 35%-to-sales.

The transaction is expected to be completed in the fourth quarter.

Arizant employs 375 people worldwide. Its sales for 2010 are expected to be about $200 million.

The company, which introduced the Bair Hugger therapy in 1987, makes products that help maintain normal body temperature in more than 20 million surgical patients annually to help prevent surgical site infections and other serious complications tied to surgical hypothermia.

3M estimates that the global opportunity for patient warming is about $1 billion, with the forced-air warming category expected to grow at about 10% a year.

Arizant is majority-owned by New York-based private equity firm Court Square Capital.

Shares of 3M stock are up 0.9% to $83.46 in late morning trading.

-- Written by Andrea Tse in New York.



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