3M and Ceradyne, Inc. have entered into a definitive agreement for 3M’s acquisition of Ceradyne for US$35.00 per share. The proposed transaction has an aggregate value of approximately US$860m, or approximately US$670m net of cash, cash equivalents, short-term investments and debt acquired.
The 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 the deal to its shareholders. The transaction is expected to close during the fourth quarter of this year.
Headquartered in Costa Mesa, California, with operations in the US, Canada, China and Germany, Ceradyne has annual revenue of approximately US$500m from the production of advanced technical ceramics for applications in the automotive, oil and gas, solar, industrial, electronics and defence industries.
Ceradyne will join the 3M Energy and Advanced Materials Division within 3M’s Industrial and Transportation Business. On a GAAP basis, 3M estimates the acquisition will be US$0.05 dilutive to earnings in the first 12 months following completion of the transaction. and US$0.01 accretive to earnings over the same period excluding purchase accounting adjustments and anticipated integration expenses.
