3M Co Announces $1B Deal To Acquire Polypore Unit

3M Co Announces $1B Deal To Acquire Polypore Unit

3M announced on Monday, February 23rd that it will acquire the assets of filtration technology company Polypore International’s Separations Media segment for about $1 billion.

Besides the 3M-Polypore deal, Japanese chemicals company Asahi Kasei Corp announced it is buying Polypore’s energy storage business.

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3M to acquire Polypore’s division for $1 billion

Filtration technology company Polypore International unveiled Monday that it has signed a definitive agreements for sale of the company. As part of the merger agreement, Japanese chemicals company Asahi Kasei Corporation, through a U.S. subsidiary, will acquire Polypore International for $60.50 per share in cash. The per share consideration signifies an enterprise value for Polypore International of approximately $3.2 billion and a premium of approximately 24% over the volume weighted average share price for the 20 trading days up to and including February 20, 2015.

As an integrated step in the transaction, immediately prior to Asahi Kasei’s acquisition of Polypore, 3M will acquire the assets of Polypore’s Separations Media segment for about $1 billion. The deal envisages Asahi Kasei to receive the cash proceeds from this asset sale. Asahi Kasei Corporation will acquire Polypore’s Energy Storage business for total net consideration of about $2.2 billion.

The definitive agreements envisage that the sale of Polypore and the integrated sale of the Separations Media segment close after the closing conditions for both transactions have been satisfied and that the closings of the transactions are conditioned upon one another.

Polypore a compelling fit for Asahi

The transactions have been approved by the boards of directors of Asahi Kasei, 3M and Polypore, and are subject to approval by Polypore shareholders. Asahi Kasei noted that the transaction would occur immediately after the closing of the sale of the Separations Media segment to 3M.

Japanese chemical company Asahi Kasei Corp indicated that Charlotte, North Carolina-based Polypore is a compelling fit with its electronic materials business, led by Asahi Kasei’s Hipore lithium-ion battery or LIB separator, with applications in energy storage for both consumer electronics and automotive applications.

Investors consider Asahi’s purchase as a further move into the electric and hybrid vehicle space. Both companies already make the lithium ion batteries that power most electric vehicles, but Polypore’s product, dry process separators, is expected to become the battery of choice in the automotive sector due to its lower costs.

Last May, it was reported that Polypore International Inc. was likely to begin manufacturing membranes for the batteries in Tesla’s “gigafactory”. Some analysts have argued Polypore will be in the lead for the Tesla contract, as the membranes are used to separate the batteries in Tesla Motors’ battery packs.

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Mani is a Senior Financial Consultant. He has worked in Senior Management role in large banking, financial and information technology organizations. He has provided solutions for major banking and securities firms across the globe in the area of retail, corporate and investment banking. He holds MBA (Finance) and Professional Management Accounting Qualifications. His hobbies are tracking global financial developments and watching sports
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