) recently announced its intention of acquiring
), a global leader in the development and production of advanced
technical ceramics, for $35 a share. The transaction is estimated
at $860 million or $670 million net of cash, cash equivalents,
short-term investments and debt.
As per the terms of the agreement, a subsidiary of 3M is
expected to initiate a tender offer for the purchase of all
outstanding shares of Ceradyne within a period of 10 days. The
offer will be subject to the tender of a majority of Ceradyne's
shares and other regulatory closing conditions. The deal is
expected to be completed by the end of this year.
With the acquisition of Ceradyne, 3M is expected to develop new
technologies and innovation for specifically designed materials
requiring advanced ceramics. Post acquisition, Ceradyne will be
integrated into the Energy and Advanced Materials division.
3M expects the transaction to be accretive to its earnings by
one cent in the very first year, on pro forma basis. On a GAAP
basis, the acquisition is expected to be accretive to earnings by 5
Based in Costa Mesa, California and with operations in the U.S.,
Canada, China and Germany, Ceradyne reported annual revenue of
approximately $500 million. The company is a global leader in the
development and production of advanced technical ceramics for
demanding applications in the automotive, oil and gas, solar,
industrial, electronics and defense industries. Therefore, this
acquisition is a strategic fit with 3M's existing transportation,
energy markets and defense businesses.
The 3M brand is recognized around the world. Household names
like Nexcare, Post-it, Scotch, Scotch-Brite and Scotchgard are
market leaders. The company remains focused on new product
development, with its scientists and innovators enjoying an
important competitive advantage worldwide. The company currently
has a Zacks #3 Rank, implying a short-term Hold rating on the
CERADYNE INC (CRDN): Free Stock Analysis Report
3M CO (MMM): Free Stock Analysis Report
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