November 19, 2007
3M and Aearo Technologies Inc, announced they have entered into a definitive agreement for 3M’s acquisition of Aearo for a total purchase price of $1.2 billion, to be financed through a combination of cash and other borrowings.
Aearo manufactures and markets personal protection and energy absorbing products and is owned by funds advised by Permira, a global private equity firm, according to a 3M news release. The release indicated Aearo will significantly expand 3M’s occupational health and environmental safety platform by adding hearing protection as well as eyewear and fall protection product lines to 3M’s existing line of respiratory products. The acquisition is reported to enable 3M to provide industrial, military and construction customers as well as consumers with a more complete personal protection solution.
“Aearo complements and significantly broadens our core safety and personal protection business, a space which is growing fast and of strategic importance to the company,” said George W. Buckley, 3M chairman, president and CEO. “The combination of 3M’s technology, our global reach and well-known safety brand with Aearo’s strong product portfolio and brands positions 3M as the global leader in personal protective equipment products. Our powerful international distribution network will enable us to enhance and leverage this asset going forward.”
3M reports Aearo has achieved the leading global market positions in hearing and eye protection through the strength of its brand names such as E-A-R, Peltor, AOSafety and SafeWaze, and its reputation for developing high-quality, innovative products and strong market competitiveness. 3M also states Aero has demonstrated a strong track record of consistent market beating growth and profitability, with sales increasing at a compound annual growth rate of more than 12% over the past five years to $508 million. The complete Aearo product line includes passive hearing, communication headsets, eye protection, head and face protection and fall protection. The company also markets systems solutions and proprietary energy absorbing materials, which are incorporated into other manufacturers’ products to control noise, vibration, shock and temperature.
A statement from 3M indicates the acquisition does not change the company’s 2007 earnings per share guidance as the transaction is not expected to close until the first quarter of 2008, subject to regulatory approvals and customary closing conditions. 3M’s financial advisor for the transaction was Lehman Brothers.