3M will receive a total consideration of approximately $650m, including cash, an interest-bearing security, and a 17% non-controlling interest in the new company
Image: 3M to sell its drug delivery business to Altaris for $650m. Photo: Courtesy of Capri23auto from Pixabay.
US-based international conglomerate 3M has signed an agreement to divest all of its drug delivery business to an affiliate of Altaris Capital Partners for $650m.
Altaris is an investment firm focused on the healthcare industry to improve patient outcomes, eliminate redundant costs, increase effectiveness and align stakeholder incentives.
Altaris managing director George Aitken-Davies said “We are excited to be partnering with 3M and the drug delivery team to support the future growth of the company. We believe the business is well-positioned to build on its successful track record as a leading provider of drug delivery technologies.”
Under the terms of the acquisition, 3M will receive total consideration of approximately $650m, including cash, interest-bearing security, and a 17% non-controlling interest in the new company, subject to closing and other adjustments.
In addition, approximately 900 employees, associated with the 3M businesses which are included in the sale, are expected to join the new company, following the completion of the transaction.
The drug delivery businesses of 3M made approximately $380m in annual sales
The company said that from the sale of its drug delivery business, it would realise a gain of $0.45 to $0.50 per share, net of actions related to the divestiture. The businesses included in the sale have reported approximately $380m in annual global sales.
Once the transaction is closed, the ownership interest of 3M in the drug delivery business will be transferred through the equity method of accounting. It will retain the transdermal drug delivery components business.
The transaction is expected to be completed in the first half of 2020, subject to customary closing conditions and regulatory approvals.
3M is engaged in developing and manufacturing pharmaceutical products using advanced inhalation, transdermal, microneedle, and conventional drug delivery technologies. It is specialised in drug delivery and collaborates with pharmaceutical and biotech companies.
3M chairman and chief executive officer Michael Roman said: “The drug delivery business is a leading provider of transdermal and inhalation delivery technologies. This transaction will allow us to focus more resources on our core health care business as well as retain a share in the value of the drug delivery business as it grows over the coming years.”