3M selling military helmet and armor business for at least $91M
By DEE DEPASS | Star Tribune | Published: August 12, 2019
(Tribune News Service) — 3M is selling its ballistic protection business, noting that its product lines including bullet-resistant helmets and body armor no longer fit with 3M’s core business strategy.
The unit is a small but higher-profile unit because of its military and law enforcement business.
3M is selling the business to Avon Rubber PLC for $91 million, but officials said it could rise by another $25 million, depending on the outcome of pending contract bids.
The division sale is subject to regulatory approval and will close by year’s end or early next year.
If completed, 280 3M employees will transfer to Avon Rubber, which is based in England and provides chemical, biological, radiological and nuclear respiratory protection systems for military, law enforcement and firefighting customers.
3M’s ballistic-protection business generates $85 million a year in sales and specializes in ballistic helmets, helmet attachments, body armor and flat armor products sold to the military and law enforcement.
The business is part of 3M’s larger Advanced Materials Business, which involves fluoropolymers, ceramics, glass bubbles and other highly engineered particles and products.
3M said in a statement last week that it decided to sell its ballistic business to “focus on other businesses within its Advanced Materials Division.” It did not elaborate.
The ballistics-products division sale is the latest in a series of divestitures recently announced by 3M as it awaits the largest acquisition in 3M history.
3M said in May that it will buy the San Antonio-based wound-care products giant Acelity Inc. and its KCI subsidiaries for a stunning $6.7 billion. Acelity boasts 4,500 employees and $1.5 billion in revenue. That deal is expected to close before the end of the year.
In the meantime, 3M has been reorganizing during a difficult time for global industrials.
During a troubling first quarter for which 3M delivered disappointing earnings results in April, 3M restructured from five businesses into four, cutting 2,000 jobs in the process.
In late July, 3M posted second quarter results in profits plunged 39%. Only one of four business enjoyed a sales increase for the quarter ended June 30.
3M noted that work continues to cut expenses, reduce factory production, slash inventories and “invest for the future.”
Officials said previously that investing for the future will mean pushing into growth products and markets and shedding businesses that no longer fit or that no longer have strong growth potential.
In June 2019, 3M announced the sale of its gas- and flame-detection business to Teledyne Technologies for $230 million. A year earlier it sold its fiber optics telecommunications business for $870 million. In 2017, 3M sold its prisoner electronic-monitoring business to Apax Partners for $200 million and its passport and identity management business to Gemalto for $850 million.
3M’s restructuring has largely won support among Wall Street analysts. But concerns about trade tariffs, a series of PFAS chemical contamination lawsuits and the slowing global economy, have weighed heavily on investors.
3M’s stock fell $1.35 a share to close at $162.12. That’s far from the 52-week high of $219 a share. Last week, 3M’s stock sunk to a 52-week low of $158.04 a share.
The decline occurred on Aug. 7 — the same day the markets experienced a big sell off and the same day 3M announced the sale of its ballistics-protection business.