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3M to buy Capital Safety in $2.5B deal

U.S. multinational giant 3M (MMM) Tuesday announced a $2.5 billion deal to acquire fall-protection firm Capital Safety from private equity firm KKR. The acquisition of the Minnesota-based private company is forecast to close in the third quarter, and is expected to reduce 3M’s earnings by 4 cents per share during the first 12 months after the deal’s completion, 3M said.3M_2_slideshow_large

However, 3M estimated the transaction would add 12 cents per share to earnings when purchase accounting adjustments and one-time expenses related to the transaction are excluded. Demand for personal protective equipment is growing rapidly, and that market represents a strategic priority for 3M, which has its large safety-products division.

Capital Safety’s products and solutions include harnesses, lanyards, self-retracting lifelines and engineered systems sold under the DBI-SALA and PROTECTA global brands, 3M said. Capital Safety’s sales have increased at a compound annual growth rate of 10% over the last four years, 3M said. The sales, adjusted to exclude recent acquisitions on a one-time basis, totaled roughly $430 million for the fiscal year that ended March 31.

The company “is a tremendous business with a strong reputation in the safety industry and a talented team of dedicated employees,” said Frank Little, executive vice president of 3M’s Safety and Graphics Business Group. “3M’s brand in personal protective equipment, combined with our global capability, will provide a broader array of products and solutions to both Capital Safety’s and 3M’s customers.” Capital Safety CEO Stephen Oswald called the acquisition “a great strategic fit” that gives Capital Safety and its employees “a strong platform for future growth.” Shares of 3M were up 0.44% at $160.12 in Tuesday morning trading.