3M Buys Ceradyne For About $847M

Mon, 10/01/2012 - 8:19am

ST. PAUL, Minn. (AP) -- Office products maker 3M is buying ceramic components maker Ceradyne for approximately $847 million in cash, saying it will complement existing businesses in the transportation, energy and defense sectors.

3M Co. said Monday that it will pay $35 for each Ceradyne Inc. share, a 43 percent premium to the company's Friday closing price of $24.43.

Ceradyne has approximately 24.2 million outstanding shares, according to FactSet.

The companies put the total value of the transaction at about $860 million.

Ceradyne's board has unanimously recommended shareholders accept the offer. A majority of Ceradyne's shares must be tendered in the offer for the acquisition to move forward.

A 3M subsidiary is expected to start a tender offer to buy all of Ceradyne's outstanding stock within 10 business days.

Ceradyne, based in Costa Mesa, Calif., has annual revenue of approximately $500 million. It will become part of 3M's energy and advanced materials unit, which is part of the industrial and transportation business.

3M, maker of Post-It sticky notes, has operations in more than 65 countries and is based in St. Paul, Minn.

3M anticipates that the buyout will add 5 cents per share to its earnings in the first year after the deal is complete. Taking out purchase accounting adjustments and expected integration expenses, the transaction is anticipated to add 1 cent to earnings per share over the same period.

The acquisition is expected to close in the fourth quarter.


Share this Story

You may login with either your assigned username or your e-mail address.
The password field is case sensitive.