3M plans to incorporate a safety subsidiary and a newly acquired company into a new fire and safety venture in partnership with investment firm Bain Capital.
The Minnesota-based manufacturing giant announced the proposed acquisition and the new joint venture on Thursday. Under the agreement, 3M and Bain would acquire suburban Chicago fire suppression and rescue technology provider Madison Fire & Rescue for $1.95 billion; that business would be combined with 3M’s Scott Safety in the new venture. 3M will own 50.1% of the joint venture, and Bain will own the remainder.
3M would also receive $700 million in cash proceeds upon closing, which is scheduled for the second half of the year.
3M and Bain officials said that the deal would combine the supplier’s expertise in the safety industry with the firm’s ability to “integrate businesses, accelerate growth and drive synergies.” The joint venture, in turn, would feature a broad portfolio to “better serve firefighters, first responders and industrial workers.”
The deal comes amid broader efforts by 3M to streamline its operations in recent years, including the spinoff of its healthcare business.
"This strategic transaction broadens 3M's safety portfolio, one of our priority verticals, by expanding our market reach and building scale for future growth," 3M CEO Bill Brown said in a statement. “It positions us to enhance margins and generate strong free cash flow, and enables continued investment in innovations that create value for customers and shareholders."
