3M (NYSE: MMM) and Ceradyne, Inc. (NASDAQ: CRDN) have entered into a definitive agreement for 3M’s acquisition of Ceradyne for $35.00 per share. The proposed transaction has an aggregate value of approximately $860 million, or approximately $670 million net of cash, cash equivalents, short-term investments and debt acquired.
Headquartered in Costa Mesa, Calif., with operations in the U.S., Canada, China and Germany, Ceradyne has annual revenue of approximately $500 million. The company is a specialist in the development and production of advanced technical ceramics for demanding applications in the global automotive, oil and gas, solar, industrial, electronics and defense industries. The unique characteristics of advanced technical ceramics offer significant advantages over traditional materials such as metals and plastics.
Ceramic ferrules have long been used in the production of 3M's fiber-optic cable assemblies and connectors.
The combination of Ceradyne and 3M will enable new technologies and innovation for uniquely tailored materials requiring advanced ceramics, say the companies. Ceradyne will join the 3M Energy and Advanced Materials Division within 3M’s Industrial and Transportation Business. The 3M Energy and Advanced Materials Division provides valued materials for lightweight solutions and materials for performance in harsh environments to customers in a broad array of growth industries.
The acquistion agreement provides for a subsidiary of 3M to commence a tender offer to purchase all outstanding shares of Ceradyne within ten business days. The board of directors of Ceradyne has unanimously recommended that the stockholders of Ceradyne accept the offer.
The Ceradyne acquistion comes in the midst of a larger restructuring effort by 3M.