3M Corp.
MMM -1.42%
on Tuesday agreed to mix its food-safety enterprise with
Neogen Corp.
NEOG -0.20%
, a meals testing and animal healthcare specialist, to create a mixed firm value $9.3 billion, together with debt.
Neogen, primarily based in Lansing, Mich., has a market worth of $4.3 billion, whereas 3M’s is round $100 billion. The Wall Road Journal earlier reported such a deal was imminent.
3M relies in St. Paul, Minn., and sells all the pieces from Publish-It Notes to Nexcare bandages and N95 masks. The food-safety enterprise is a part of its healthcare enterprise, one among its 4 main models.
The deal is structured as a Reverse Morris Belief, a tax-efficient means for firms to unload a division, with Neogen’s administration group operating the mixed firm. It values the 3M unit at $5.3 billion. Present 3M shareholders will personal 50.1% of the mixed firm.
A lot of 3M’s industrial conglomerate friends resembling
Common Electrical Co.
and
Emerson Electrical Co.
have been splitting up or shedding property in response to investor demand for centered firms.
Neogen provides check kits and different merchandise to assist monitor sanitation and allergens in all places within the meals provide chain from “the farm gate to the dinner plate.”
Neogen’s chief government officer,
John Adent,
who will lead the mixed firm, stated in an interview that talks in regards to the deal stretch again to 2019. He stated it would create a extra environment friendly food-safety firm with a steadiness sheet primed for future offers. “It provides us the dimensions we’d like,” he stated.
The deal would broaden Neogen’s product choices and its analysis and growth capabilities, the businesses stated. The mix would make Neogen’s meals security section about 70% of its complete income and the mixed firm would have projected gross sales of about $1 billion within the first full yr post-closing.
Write to Cara Lombardo at cara.lombardo@wsj.com and Patrick Thomas at Patrick.Thomas@wsj.com
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