3M has entered into a definitive agreement to acquire Bloomington, Minn.-based Capital Safety from private equity firm KKR for $2.5 billion, including the assumption of $700 million of debt, net of cash acquired. Capital Safety is a leading global provider of fall-protection equipment, one of the fastest-growing safety categories within the personal protective equipment industry.
Capital Safety’s products include harnesses, lanyards, self-retracting lifelines and engineered systems sold under the DBI-Sala and Protecta brands. The company has demonstrated consistent growth with sales increasing at a compound annual growth rate of 10 percent over the past four years. The company’s sales were about $430 million for its fiscal year ended March 31.
3M’s Personal Safety business is a global provider of respiratory and hearing protection solutions that help improve the safety and security of workers. The business also supplies products such as reflective materials for high-visibility apparel, protective clothing and eyewear, among others.
“Personal safety is a large and strategically important growth business in the 3M portfolio,” said Inge Thulin, 3M chairman, president and CEO. “The acquisition of Capital Safety bolsters our personal safety platform and will build on our fundamental strengths in technology, manufacturing, global capabilities and brand.”
“Capital Safety is a tremendous business with a strong reputation in the safety industry and a talented team of dedicated employees,” added Frank Little, executive vice president, 3M Safety and Graphics Business Group.
“This is a great strategic fit and provides Capital Safety and its employees with a strong platform for future growth,” said Stephen Oswald, CEO of Capital Safety.
The transaction is expected to close in the third quarter, subject to customary closing conditions and regulatory approvals. 3M will finance the transaction with existing cash, a portion of which will come from outside the United States.
According to the Minneapolis-St. Paul Business Journal, KKR, which acquired Capital Safety three years ago, will make a $1.3 billion profit on the buyout.