3M 2007 Annual Report Download - page 55

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proceeds of $1.209 billion for this transaction and recognized, net of assets sold, a pre-tax gain of $1.074 billion
(recorded in Health Care Business) in 2006.
Buyer and sale price information by region is as follows:
• Meda AB acquired 3M’s pharmaceuticals business in Europe for $817 million in 2007.
• Graceway Pharmaceuticals Inc. acquired 3M’s pharmaceutical operations in the United States, Canada, and
Latin America for $860 million in 2006.
• Ironbridge Capital and Archer Capital acquired 3M’s pharmaceuticals business in the Asia Pacific region,
including Australia and South Africa for $349 million in 2006.
The agreements are the result of a review of strategic options for the branded pharmaceuticals business and its
immune response modifier (IRM) platform that 3M announced in April 2006. Under the agreements, the purchasers
acquired regional marketing and intellectual property rights for 3M’s well-known branded pharmaceuticals, including
Aldara, Difflam, Duromine, Tambocor, Maxair, Metrogel-Vaginal and Minitran. As part of the transaction, Graceway
Pharmaceuticals also acquired the rights to certain IRM molecules.
In connection with these transactions, 3M entered into agreements whereby its Drug Delivery Systems Division
became a source of supply to the acquiring companies. Because of the extent of 3M cash flows from these
agreements in relation to those of the disposed-of businesses, the operations of the branded pharmaceuticals
business are not classified as discontinued operations. See Note 4 for further discussion of restructuring actions that
resulted from the divestiture of the Company’s global branded pharmaceuticals business.
In June 2007, 3M completed the sale of its Opticom Priority Control Systems and Canoga Traffic Detection businesses
to TorQuest Partners Inc., a Toronto-based investment firm. 3M received proceeds of $80 million for this transaction
and recognized, net of assets sold, transaction and other costs, a pre-tax gain of $68 million (recorded in the Display
and Graphics segment) in 2007.
Acquisitions:
During 2007, the purchase price paid for business combinations totaled $539 million, net of cash acquired, plus
approximately 150 thousand shares of 3M common stock, which had a market value of approximately $13 million.
The 16 business combinations completed during 2007 are summarized as follows:
1) In February 2007, 3M (Industrial and Transportation Business) purchased certain assets of Accuspray Application
Technologies Inc., a manufacturer of spray paint equipment with a wide array of spray guns for architectural,
automotive refinishing, industrial and woodworking applications.
2) In February 2007, 3M (Industrial and Transportation Business) purchased Sealed Air Corporation’s 50 percent
interest in PolyMask Corporation, a joint venture between 3M and Sealed Air that produces protective films. The
acquisition of Sealed Air’s interest results in 100 percent ownership by 3M.
3) In February 2007, 3M (Health Care Business) purchased 100 percent of the outstanding shares of Acolyte
Biomedica Ltd., a Salisbury, U.K.-based provider of an automated microbial detection platform that aids in the rapid
detection, diagnosis, and treatment of infectious diseases.
4) In May 2007, 3M (Safety, Security and Protection Services Business) purchased 100 percent of the outstanding
shares of E Wood Holdings PLC, a North Yorkshire, UK-based manufacturer of high performance protective coatings
for oil, gas, water, rail and automotive industries.
5) In May 2007, 3M (Electro and Communications Business) purchased certain assets of Innovative Paper
Technologies LLC, a manufacturer of inorganic-based technical papers, boards and laminates for a wide variety of
high temperature applications and Powell LLC, a supplier of non-woven polyester mats for the electrical industry.
6) In May 2007, 3M (Health Care Business) purchased certain assets of Articulos de Papel DMS Chile, a Santiago,
Chile-based manufacturer of disposable surgical packs, drapes, gowns and kits.
7) In June 2007, 3M (Industrial and Transportation Business) purchased certain assets of Diamond Productions Inc.,
a manufacturer of superabrasive diamond and cubic boron nitride wheels and tools for dimensioning and finishing
hard-to-grind materials in metalworking, woodworking and stone fabrication markets in exchange for approximately
150 thousand shares of 3M common stock, which had a market value of $13 million at the acquisition measurement
date and was previously held as 3M treasury stock.
8) In July 2007, 3M (Safety, Security and Protection Services Business) purchased 100 percent of the outstanding
shares of Rochford Thompson Equipment Ltd., a manufacturer of optical character recognition passport readers used
by airlines and immigration authorities, headquartered in Newbury, U.K.
9) In August 2007, 3M (Health Care Business) purchased certain assets of Neoplast Co. Ltd., a
manufacturer/distributor of surgical tapes and dressings and first aid bandages for both the professional and
consumer markets across the Asia Pacific region.
10) In October 2007, 3M (Health Care Business) purchased 100 percent of the outstanding shares of Abzil Industria e
Comercio Ltda., a manufacturer of orthodontic products based in Sao Jose do Rio Preto, Sao Paulo, Brazil.