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47
Year 2004 acquisitions:
In February 2004, 3M (Industrial Business) purchased 100 percent of the outstanding common shares of
HighJump Software, Inc., a U.S. company that provides supply chain execution software and solutions. The total
purchase price of approximately $66 million included $23 million of cash paid (net of cash acquired) plus
541,581 shares of 3M common stock. The 3M common stock had a market value of $43 million at the acquisition
measurement date and was previously held as 3M treasury stock.
In March 2004, 3M (Safety, Security and Protection Services Business) purchased 91 percent of the outstanding
shares of Hornell Holding AB, a Swedish company, for approximately $95 million, including assumption of debt.
This $95 million includes $57 million of cash paid (net of cash acquired) and the acquisition of $38 million of debt,
most of which has been repaid. Subsequently, 3M acquired all of the remaining outstanding shares for
approximately $6 million in cash. Hornell Holding AB is a global supplier of personal protective equipment for
welding applications.
In August 2004, 3M (Health Care Business) purchased 100 percent of the outstanding shares of Info-X Inc., a
U.S. company, for $17 million in cash (net of cash acquired). The acquired company provides coding compliance
software and data for health care organizations.
Purchased identifiable intangible assets for these acquisitions are being amortized on a straight-line basis over lives
ranging from two to 20 years (weighted-average life of 11 years). Research and development charges from these
acquisitions totaled $1 million. Pro forma information related to these acquisitions is not included because the impact
of these acquisitions, either individually or in the aggregate, on the Company’s consolidated results of operations is not
considered to be material.
In September 2004, 3M and Corning Incorporated reached a settlement related to issues associated with 3M’s
2002 acquisition of Corning Precision Lens, Inc. (now called Precision Optics, Inc.). In September 2004, 3M
received $30 million from Corning related to this settlement.
The purchase price allocations and the resulting impact on the Consolidated Balance Sheet relating to all 2004
acquisitions follow:
2004 ACTIVITY Hornell
Holding AB Precision
Asset (Liability) HighJump and Optics, Inc. Total
(Millions) Software, Inc. Subsidiaries Info-X Inc. (2004 activity) Activity
Accounts receivable $ 6 $ 7 $ 2 $ – $ 15
Inventories – 9 – – 9
Other current assets 1 1 – – 2
Property, plant and equipment – net 1 6 – – 7
Purchased intangible assets 18 21 5 (17) 27
Purchased goodwill 52 72 17 (13) 128
Deferred tax asset 3 – – – 3
Accounts payable and other
current liabilities (4) (8) (2) – (14)
Interest bearing debt – (38) – – (38)
Deferred revenue (6) – (3) – (9)
Other long-term liabilities (5) (7) (2) – (14)
Net assets acquired $ 66 $ 63 $ 17 $ (30) $ 116
Supplemental information:
Cash paid/(received) $ 24 $ 66 $ 20 $ (30) $ 80
Less: Cash acquired 1 3 3 – 7
Cash paid, net of cash acquired $ 23 $ 63 $ 17 $ (30) $ 73
Non-cash (3M shares at fair value) 43 – – – 43
Net assets acquired $ 66 $ 63 $ 17 $ (30) $ 116