3M to acquire medtech company Acelity in $6.7 billion deal

3M logo3M (St. Paul, MN) announced yesterday that it has entered into a definitive agreement to acquire privately held Acelity Inc. (San Antonio, TX) and its KCI subsidiaries worldwide in a deal valued at $6.7 billion. Acelity is a global medical technology company focused on advanced wound care and specialty surgical applications marketed under the KCI brand. The acquisition, which was announced shortly after 3M reported a dismal Q1 earnings report and subsequent layoffs, is expected to bolster its Medical Solutions business.

“Acelity is a recognized leading provider of advanced wound care technologies and solutions and an excellent complement to our Health Care business,” said Mike Roman, 3M CEO, in a prepared statement. The acquisition supports 3M’s growth strategy to offer “comprehensive advanced and surgical wound care solutions to improve outcomes and enhance the patient and provider experience,” added Roman.

“The maker of Post-it notes and Scotch tape is buying the company and some of its units from a consortium of funds advised by Apax Partners, affiliates of Canada Pension Plan Investment Board and the Public Sector Pension Investment Board,” reported Reuters.

The Acelity business is well known for creating and growing new segments based on the ability to identify and address unmet clinical needs with KCI-branded products that advance the practice of medicine, beginning with the introduction of V.A.C. Therapy, groundbreaking negative pressure wound therapy, said 3M in a press release. Today, the KCI product offering also includes advanced wound dressings and negative pressure surgical incision management systems. KCI’s solutions contribute to better health outcomes by enhancing wound healing. Acelity had 2018 revenues of $1.5 billion, according to 3M.

The advanced wound care market is valued at more than $8 billion and is growing at a rate of 4 to 6% annually, according to Reuters.

The transaction is expected to close in the second half of 2019, subject to customary closing conditions and regulatory approvals. 3M will finance the transaction with a combination of available cash and proceeds from the issuance of new debt.

The deal comes on the heels of another big acquisition from 3M. The company said it would shell out $1 billion to acquire M*Modals technology business, reported sister brand MD+DI. “The acquisition would give 3M access to a business that specializes in conversational artificial intelligence (AI)-powered systems that can help physicians efficiently capture and improve the patient narrative,” writes MD+DI Managing Editor Omar Ford.

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