3M Co. (MMM) has said it has reached an agreement to buy ceramic armor maker Ceradyne Inc. (CRDN) for $35 per share in a deal valued at about $860 million. The value of the transaction is based upon approximately $670 million net in cash, cash equivalents, investments and acquisition of debt. The offer represents a 43 percent premium over Ceradyne’s Friday closing price of $24.43.
3M said that excluding one-time costs related to accounting adjustments and integration expenses, the acquisition will add about one cent per share to its earnings in the first year upon closing the deal. It is expected that the deal will close during the fourth quarter of this year.
Ceradyne is headquartered in Costa Mesa, Calif., with operations in the U.S., Canada, China and Germany. The company has annual revenue of approximately $500 million.
Noting that the acquisition of Ceradyne is an excellent complement to its existing operations, 3M Industrial and Transportation Business Executive Vice President Chris Holmes said, “Ceradyne is a strong company with a great reputation, world-class technology in advanced ceramics, and leadership positions in the markets it serves.”
Upon completion of the transaction, Ceradyne will become a component of 3M’s Energy and Advanced Materials unit within its Industrial Transportation Business.
The Board of Directors of Ceradyne has unanimously recommended that the stockholders of Ceradyne accept the offer.
In its most recent news, on September 26, Ceradyne reported that it received its first delivery order covering two months of 2013 ESAPI requirements totaling over $14 million.
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