ST. PAUL, Minn. & COSTA MESA, Calif.--(BUSINESS WIRE)--3M (NYSE:MMM) and Ceradyne, Inc. (NASDAQ:CRDN) announced today that they
have entered into a definitive agreement for 3M’s acquisition of
Ceradyne, Inc. for $35.00 per share. The proposed transaction has an
aggregate value of approximately $860 million, or approximately $670
million net of cash, cash equivalents, short-term investments and debt
acquired.
The agreement provides for a subsidiary of 3M to commence a tender offer
to purchase all outstanding shares of Ceradyne within ten business days.
The Board of Directors of Ceradyne has unanimously recommended that the
stockholders of Ceradyne accept the offer. The offer will be subject to
the tender of a majority of Ceradyne’s shares and to certain other
customary closing conditions. The transaction is expected to close
during the fourth quarter of this year.
Headquartered in Costa Mesa, Calif., with operations in the U.S.,
Canada, China and Germany, Ceradyne has annual revenue of approximately
$500 million. Ceradyne is a worldwide leader in the development and
production of advanced technical ceramics for demanding applications in
the automotive, oil and gas, solar, industrial, electronics and defense
industries. The unique characteristics of advanced technical ceramics
offer significant advantages over traditional materials such as metals
and plastics.
The combination of Ceradyne and 3M will enable new technologies and
innovation for uniquely tailored materials requiring advanced ceramics.
Ceradyne will join the 3M Energy and Advanced Materials Division within
3M’s Industrial and Transportation Business. The 3M Energy and Advanced
Materials Division provides valued materials for lightweight solutions
and materials for performance in harsh environments to customers in a
broad array of growth industries.
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. Ceradyne is an excellent complement to our
existing businesses in transportation, energy markets and defense. By
joining 3M, Ceradyne associates will have the opportunity to use the
power of 3M’s global reach, culture of commercializing new products and
operational discipline to accelerate this platform in serving our
customers with highly valued solutions.”
“3M is renowned for its innovation, its R&D and its global reach,” said
Joel Moskowitz, CEO, Ceradyne, Inc. “This is a great fit and I know that
advanced ceramics technologies have a tremendous future within 3M and
can contribute to the development of unique solutions for many demanding
applications.”
On a GAAP reported basis, 3M estimates the acquisition to be $0.05
dilutive to earnings in the first 12 months following completion of the
transaction. Excluding purchase accounting adjustments and anticipated
integration expenses, 3M estimates the acquisition to be $0.01 accretive
to earnings over the same period.
Credit Suisse acted as exclusive financial advisor to 3M. Citibank acted
as financial advisor to Ceradyne.
Additional Information
The tender offer described in this news release has not yet commenced.
This news release and the description contained herein is neither an
offer to purchase nor a solicitation of an offer to sell shares of
Ceradyne, Inc. At the time the tender offer is commenced, 3M and its
wholly owned subsidiary, Cyborg Acquisition Corporation, intend to file
with the Securities and Exchange Commission (the “SEC”) a Tender Offer
Statement on Schedule TO containing an offer to purchase, a form of
letter of transmittal and other documents relating to the tender offer,
and Ceradyne intends to file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 with respect to the tender offer. 3M, Cyborg
Acquisition Corporation and Ceradyne intend to mail these documents to
the stockholders of Ceradyne. These documents will contain important
information about the tender offer and stockholders of Ceradyne are
urged to read them carefully when they become available. Stockholders of
Ceradyne will be able to obtain a free copy of these documents (when
they become available) and other documents filed by Ceradyne, 3M or
Cyborg Acquisition Corporation with the SEC at the website maintained by
the SEC at www.sec.gov.
In addition, stockholders will be able to obtain a free copy of these
documents (when they become available) from the information agent named
in the offer to purchase or from 3M.
Forward-Looking Statements
This news release contains forward-looking statements about 3M’s and
Ceradyne’s financial results and estimates and/or business prospects
that involve substantial risks and uncertainties. You can identify these
statements by the use of words such as “anticipate,” “estimate,”
“expect,” “project,” “intend,” “plan,” “believe,” “will,” “target,”
“forecast,” “future,” “opportunity,” “accelerate” and other words and
terms of similar meaning in connection with any discussion of future
operating or financial performance or business plans or prospects. Such
statements are qualified by the inherent risks and uncertainties
surrounding future expectations generally, and also may materially
differ from actual future experience involving any one or more of such
statements. Such risks and uncertainties include: uncertainties as to
the timing of the tender offer and merger; uncertainties as to how many
Ceradyne, Inc. stockholders will tender their shares of Ceradyne stock
in the tender offer; the risk that competing offers will be made; the
possibility that various closing conditions for the transaction may not
be satisfied or waived, including that a governmental entity may
prohibit, delay or refuse to grant approval for the consummation of the
transaction; any conditions imposed by governmental or regulatory
authorities in connection with consummation of the tender offer and the
merger; satisfaction of various other conditions to the completion of
the tender offer and the merger contemplated by the merger agreement;
the possibility that expected benefits may not materialize as expected;
and other risk factors as set forth from time to time in 3M’s and
Ceradyne’s filings with the SEC. The factors that could cause actual
results to differ materially include the following: (1) worldwide
economic and capital markets conditions and other factors beyond 3M’s or
Ceradyne’s control, including natural and other disasters affecting the
operations of 3M, Ceradyne or their respective customers and suppliers;
(2) 3M’s credit ratings and its cost of capital; (3) competitive
conditions and customer preferences; (4) foreign currency exchange rates
and fluctuations in those rates; (5) the timing and market acceptance of
new product offerings; (6) the availability and cost of purchased
components, compounds, raw materials and energy (including oil and
natural gas and their derivatives) due to shortages, increased demand or
supply interruptions (including those caused by natural and other
disasters and other events); (7) the impact of acquisitions, strategic
alliances, divestitures, and other unusual events resulting from
portfolio management actions and other evolving business strategies, and
possible organizational restructuring; (8) generating fewer productivity
improvements than estimated; (9) security breaches and other disruptions
to 3M’s information technology infrastructure; and (10) legal
proceedings, including significant developments that could occur in the
legal and regulatory proceedings described in 3M’s Annual Report on Form
10-K for the year ended December 31, 2011 and its subsequent quarterly
reports on Form 10-Q (the “3M Reports”). Changes in such assumptions or
factors could produce significantly different results. A further
description of these factors is located in the 3M Reports under “Risk
Factors,” “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and “Quantitative and Qualitative Disclosures
About Market Risk” in Part I, Item 1A and Part II, Items 7 and 7A
(Annual Report) and in Part I, Items 2 and 3 and Part II, Item 1A
(Quarterly Report) and in Part I, Item 1A of Ceradyne’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2011 under “Risk
Factors.” The information contained in this news release is as of the
date indicated. 3M and Ceradyne assume no obligation to update any
forward-looking statements contained in this news release as a result of
new information or future events or developments.
About Ceradyne, Inc.
Founded in 1967, Ceradyne has diversified its product lines to capture
opportunities created by the growing demand for better materials
performance. Ceradyne develops, manufactures and markets advanced
technical ceramic products and components for defense, industrial,
energy, automotive/diesel and commercial applications. Additional
information can be found at Ceradyne’s website: www.Ceradyne.com.
About 3M
3M captures the spark of new ideas and transforms them into thousands of
ingenious products. Our culture of creative collaboration inspires a
never-ending stream of powerful technologies that make life better. 3M
is the innovation company that never stops inventing. With $30 billion
in sales, 3M employs 84,000 people worldwide and has operations in more
than 65 countries. For more information, visit www.3M.com
or follow @3MNews on Twitter.
