3M Company agreed to acquire Scott Technologies, Inc. from Johnson Controls International plc for $2 billion.
March 15, 2017
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3M Company (NYSE:MMM) agreed to acquire Scott Technologies, Inc. from Johnson Controls International plc (NYSE:JCI) for $2 billion on March 16, 2017. The transaction will be financed through a combination of cash and debt. The consideration will be funded through public offering of the notes of $400 million. For the trailing twelve months, Scott Technologies reported $570 million of revenues and $155 million of EBITDA. The transaction is subject to customary closing conditions, regulatory approvals, anti-trust approval and information or consultation requirements with relevant works councils. On April 21, 2017, Federal Trade Commission approved the deal. On October 2, 2017, European Commission unconditionally approved the transaction. The transaction is expected to close in the second half of calendar 2017. Net cash proceeds from the transaction are expected to approximate $1.8 to $1.9 billion, and will be used to repay a portion of Tyco International Holding Sarl's $4.0 billion of merger related debt. The acquisition to be $0.10 dilutive to earnings in the first 12 months on a GAAP reported basis and is expected to b $0.10 accretive to earnings over the same period, excluding purchase price accounting adjustments and anticipated one-time expenses. The consideration will be funded through public offering of the notes of $400 million.
Citigroup Inc. (NYSE:C) and Goldman, Sachs & Co. acted as financial advisor whereas Cleary Gottlieb Steen & Hamilton LLP acted as legal advisor to 3M Company. Centerview Partners LLC acted as financial advisor whereas Alan Klein, Elizabeth Cooper, Leah Baucom, Izzy Lubarsky, Deepa Thimmapaya, Greg Grogan, Patricia Adams, Monisha Bhayana, Lori Lesser, Genevieve Dorment, Robert Holo, Andrew Purcell, Morgan Otway, Adeeb Fadil, Louise Kruger, Krista McManus, Peter Guryan, Ellen Frye, John Goheen and Karen Horvitz of Simpson Thacher & Bartlett LLP and Axinn, Veltrop & Harkrider LLP acted as legal advisors to Johnson Controls International plc (NYSE:JCI). Andrew Rich, Drew Pearson, John Natal, Josh Santilli and Sophie Beaman of Herbert Smith Freehills also acted as legal advisors to Johnson Controls. Derek McCombe and Cheree Gemmell from Maclay Murray & Spens LLP acted as legal advisor to Johnson Controls International.
Johnson Controls International Plc specializes in the design, manufacturing and marketing of equipment for the regulation and safety of buildings. Net sales break down by family of products and services as follows:
- building regulation, integrated management and security equipment, systems and services (64.1%): refrigeration, ventilation, air conditioning, heating systems, access control systems, anti-intrusion, video surveillance, safety and protection devices and fire detection and suppression systems, etc. to commercial and industrial buildings. At the same time, the group provides installation and maintenance services. Net sales break down by geographic region between North America (60.1%), Europe/Middle East/Africa/Latin America (23.9%) and Asia/Pacific (16%);
- heating, air conditioning, refrigeration, fire protection and security systems for residential and commercial uses (35.9%).
Net sales break down by source of revenue between sales of products (75.6%) and services (24.4%).
Net sales are distributed geographically as follows: the United States (52.3%), Asia-Pacific (20.9%), Europe (18.2%) and other (8.6%).
JOHNSON CONTROLS INTERNATIONAL PLC 
