3M Acquires Acelity And Its KCI Subsidiaries For $6.7bn

3M, the industrial products and consumer goods giant announced that it recently completed the acquisition of global medical tech company, Acelity, Inc under the Kinetic Concepts and Systagenix brands.

The deal adds Acelity's vast advanced wound care and specialty surgical applications to 3M's developing healthcare technology portfolio. The San Antonio-based company offers its products across almost 90 countries, with their portfolio comprising of negative pressure wound therapy, advanced wound dressings, and negative pressure surgical incision management systems. Currently, 3M’s Medical Solutions business offers a variety of products, including medical tapes, advanced and acute wound care dressings and products, sterilization products and patient warming products.

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“We are excited to have the tremendous people of Acelity join the 3M team and are confident in the value that this acquisition will deliver to our customers and our shareholders,” said Mike Roman, 3M Chairman and CEO. “This addition further accelerates 3M as a leader in advanced wound care, which is a significant and growing market segment.”

This is the most expensive acquisition in 3M’s history but is being touted as a smart move. As Acelity continues to grow, it has the potential to add $1.65 billion to 3M's Healthcare division by the end of the 2020 fiscal year. The buyout will also push the price estimate for 3M's shares above $200. Acelity reported annual revenue of around $1.5 billion in 2018.

Notably, 3M’s share price increased roughly by 3.8% in October, closing the trading session at $158.10.

This comes after 3M’s recent acquisition of M*Modal, a prominent healthcare technology provider of conversational AI-powered systems in February. This buyout strengthened 3M's Health Information Systems business and also generated an additional $75 million in revenues in the second quarter of 2019.

Following the news of the buyout, eight top executives departed the medical device company, including Acelity CEO Andrew Eckert, president & COO Gaurav Agarwal, CFO Tracy Jokinen, general counsel John Bibb, international president Ramesh Subrahmanian and Rohit Kashyap, president of global commerce.

Two senior vice presidents Vikram Bajaj, SVP of strategy and business development and Cindy Beaulieu who led business transformation also have left the company.

3M declined to comment on individual departures.