3M plans to spin off its Health Care business, including its oral care offerings, into a separate standalone company.
3M announced its intent to spin off its Health Care business, resulting in two standalone public companies with distinct growth plans.
The New 3M will remain a global material science innovator serving customers across a range of industrial and consumer end markets and Health Care will be a global diversified healthcare technology company focused on wound care, healthcare IT, oral care, and biopharma filtration.
“Today’s actions advance our ability to create value for customers and shareholders,” said Mike Roman, 3M chairman and chief executive officer . “The decision to spin off our Health Care business will result in two well-capitalized, world-class companies, well positioned to pursue their respective priorities.”
Health Care, with approximately $8.61 billion in sales in 2021, will be a diversified healthcare technology company with a portfolio of known brands, global capabilities, and offerings in several market segments.
Health Care will be better positioned to deliver industry-leading innovation that enables better, smarter, and safer healthcare for patients worldwide. It will focus on growth, grounded in the business’s track record of profitability. With robust cash flow generation, Health Care will be well positioned to pursue its strategic objectives, according to 3M.
Health Care is currently expected to be spun off with net leverage of approximately 3.0x – 3.5x EBITDA and to be positioned for rapid deleveraging. Additionally, New 3M expects to retain a stake of 19.9% in Health Care, which will be monetized over time.
The spin-off is intended to be tax-free for U.S. federal income tax purposes. The Company expects to complete the transaction by year-end 2023.
Photo courtesy of 3M