Johnson Controls sells Scott Safety unit to 3M

March 20, 2017: Johnson Controls International plc officials have reached an agreement to sell its Scott Safety unit to 3M Co. for $2 billion. Scott Safety, which employs 1,500 worldwide and is based in Monroe, N.C., makes self-contained breathing apparatus systems and gas- and flame-detection instruments. In 2016, the company reported annual revenue of about $570 million. Johnson Controls officials said the transaction reflects its commitment to its Buildings and Energy platforms "Consistent with our priority to focus the portfolio on our two core platforms of Buildings and Energy, we continue to execute on our strategic plan, which positions us to deliver a 12 percent to 15 percent earnings per share CAGR by fiscal 2020," said Alex Molinaroli, Johnson Controls Chairman and Chief Executive Officer. Net cash proceeds from the transaction are expected to approximate $1.8 billion to $1.9 billion, and will be used to repay a portion of Tyco International Holding's $4 billion of merger-related debt. The transaction is expected to close in the second half of 2017, subject to customary closing conditions including required regulatory approval. The acquisition adds to Maplewood, Minn.-based 3M's personal safety portfolio. “Personal safety is a core growth business within the 3M portfolio,” said Inge Thulin, 3M President and CEO, in a press release. “This acquisition leverages our fundamental strengths in technology, manufacturing, global capabilities and brand, and builds upon recent portfolio actions within our Safety and Graphics business to position it for long-term success.” 3M officials plan to finance the transaction through a combination of cash and debt.

Attribution: The Minneapolis-St. Paul Business Journal

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