3M has announced its biggest deal yet – an acquisition the Maplewood, Minnesota, company hopes will give it a leg up in the safety equipment business.
In a Wednesday news release, the conglomerate said it will buy Capital Safety, a leading manufacturer of fall protection gear, for $2.5 billion.
The Bloomington, Minnesota-based company, whose products include safety harnesses and "self-retracting lifelines" (which are used to safeguard workers in risky environments, like high-rise construction projects) is a global leader in its field, 3M says.
What's in it for 3M?
Aside from their signature products (like Scotch tape and Bondo, to name just two) and its forays into medical technology, the Fortune 500 company also has an expanding safety gear business.
With "demand for personal protective equipment" growing rapidly, 3M CEO Inge G. Thulin said the acquisition "bolsters our personal safety platform and will build on our fundamental strengths" in a number of other areas.
The Star Tribune points out that, indeed, 3M's personal safety arm has "limited offerings" in the sort of fall protection systems Capital Safety specializes in.
The purchase is almost twice as large as the company's last record-setting acquisition, the paper says.
The deal is also a boon for Capital Safety's owners, New York-based private equity firm KKR.
They bought the company three years ago and now stand to make a $1.3 billion profit on the buyout, the Minneapolis-St. Paul Business Journal reports.
The transaction is expected to close in the third quarter.
Capital Safety currently employs about 1,500 worldwide.