3M and Capital Safety from KKR have entered into a definitive agreement. 3M acquires Capital Safety and this acquisition has a total enterprise value of $2.5 billion, including the assumption of approximately $0.7 billion of debt.
Capital Safety is a leading provider of fall protection equipment in the world. This is one of the fastest-growing safety categories in global personal protective equipment industry. The personal protective equipment industry is very important to 3M simply because the demand for personal protective equipment is rapidly growing.
Some of the personal safety products and solutions that are developed by Capital Safety include harnesses, lanyards, self-retracting lifelines and engineered systems sold under well-known global brands DBI-SALA and PROTECTA.
On the other hand, 3M’s Personal Safety business which is a part of 3M’s Safety and Graphics Business Group is provider of respiratory and hearing protection solutions that help improve the safety and security of workers. Aside from these there are also reflective materials for high-visibility apparel, protective clothing and eyewear.
Inge G. Thulin, 3M chairman, president and chief executive officer, mentioned in a statement “Personal safety is a large and strategically important growth business in the 3M portfolio.” He said. “The acquisition of Capital Safety bolsters our personal safety platform and will build on our fundamental strengths in technology, manufacturing, global capabilities and brand.”
Pete Stavros, member of KKR and head of the Industrials team, mentioned in a statement “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.” He said, “3M is a perfect home for a company and team that is so deeply committed to safety.”
Stephen Oswald, chief executive officer, Capital Safety, said “This is a great strategic fit and provides Capital Safety and its employees with a strong platform for future growth. 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.”
3M estimates the acquisition to be $0.04 dilutive to earnings in the first 12 months following completion of the transaction. This excludes 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 same period. The effective enterprise value multiple is approximately 14 times annual adjusted EBITDA for the first 12 months following the completion of the transaction.
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.
The 3M Company, formerly known as the Minnesota Mining and Manufacturing Company, is an American multinational conglomerate corporation with headquarters in St. Paul, Minnesota. 3M employs 88,000 people worldwide and produces more than 55,000 products, including: adhesives, abrasives, laminates, passive fire protection, dental and orthodontic products, electronic materials, medical products, car-care products, electronic circuits, and optical films. 3M has operations in more than 65 countries including 29 international companies with manufacturing operations and 35 companies with laboratories. 3M stock market evolution: http://www.marketwatch.com/investing/stock/mmm
About Capital Safety
Capital Safety is a manufacturer of fall protection, confined space, and rescue equipment for oil and gas, construction, utilities, wind energy, transportation, telecommunication, mining, and general industries. Capital Safety also provides in-house and on-site fall protection and rescue training services. It partners with insurance providers to hold 4-hour to 5-day safety training classes. Capital Safety is based in Bloomington, Minnesota. Capital Safety stock market evolution http://finance.yahoo.com/q?s=KKR
About Inge Thulin
Mr. Inge Thulin is the Executive Vice President and Chief Operating Officer of 3M Company. He holds an MBA in Economics and Marketing from Gothenburg University / IHM Business School, Gothenburg, Sweden School of Economics and Commercial Law in 1978. He received a DHIM degree in Marketing and Strategy from Gothenburg University’s IHM Business School in Gothenburg, Sweden.
About Stephen G. Oswald
Mr. Stephen G. Oswald has been Chief Executive Officer of Capital Safety, Inc. Since March 201, Mr. Oswald oversees Capital Safety’s global operations, which includes 20 manufacturing, distribution and training facilities worldwide. Mr. Oswald holds an MBA from the University of Chicago. He also holds a Master’s degree in Industrial Engineering from the University of Cincinnati and a Bachelor’s Degree in Industrial Engineering from Polytechnic University in Brooklyn, New York. He is a graduate of GE’s Manufacturing Management Program.
About Pete Stavros
Pete Stavros is a Partner, Head of the Industrials investment team, and member of the Investment Committee within KKR’s Private Equity platform in the Americas. He holds an A.B. and B.S., magna cum laude, from Duke University and an M.B.A. with high distinction, Baker Scholar, from Harvard Business School. Mr. Stavros is a member of the Board of Visitors at the Fuqua School of Business at Duke University.