3M has long been a leader in pharmaceutical development. Its branded pharmaceutical business includes a range of products for oral, topical and transdermal use. Its Drug Delivery Systems Division provides solutions for the delivery of various pharmaceuticals, including insulin and anti-reflux therapies. Its other product lines include inhalers and microneedles. The company also provides a variety of manufacturing services.
The 3M branded pharmaceutical business specializes in developing, manufacturing, and selling branded pharmaceutical products. Its 1,500 employees work around the world. While its overall business model has been very successful, the company is increasingly looking for strategic alternatives that will improve its competitiveness and allow it to focus on new technologies and products. This includes focusing on a more diverse pipeline of new products and long-term risk-reward business models.
The sale of 3M’s branded pharmaceutical business is expected to raise $2.1 billion. Three separate buyers will be acquiring the company’s pharmaceutical operations in the United States, Canada, and Europe. The deal will also include the company’s Asia-Pacific operations. Graceway Pharmaceuticals plans to focus on chronic diseases and pain, while Meda and Ironbridge Capital will focus on the company’s European and Asian operations.
3M branded pharmaceutical business healthcare division reported a $1.8 billion operating profit in 2006, up 65% from 2005. The company’s core medical and dental businesses helped drive growth in the division. Besides its branded pharmaceutical business, 3M also offers a range of medical products. A recent introduction of Tegaderm, an infection prevention product for intravenous sites, could further boost 3M’s growth prospects. By selling the branded pharmaceutical business, 3M can focus on its core medical products business.
Earlier this year, 3M announced that it had retained Goldman Sachs to help it in its strategic alternatives process. During this year, the company reached agreements to sell its global branded pharmaceutical business for $2.1 billion. The total price of the deal includes cash, and it is $600.0 million below analysts’ consensus estimates. The transaction also involves a range of other deals, including acquisition of 3M’s European branded pharmaceutical business.
The company hopes that the split will allow both companies to focus on their respective priorities and focus on the areas of their expertise. It expects that 70% of its workforce will find new jobs with the new owners of the pharmaceutical division. The tax-free spinoff is expected to be completed by the end of next year. In addition to the healthcare division, 3M is also separating its food safety business into a separate entity called Neogen.
3M branded pharmaceutical business is a global diversified technology company with many consumer brands. Its pharmaceutical division includes branded prescription and over-the-counter medicines distributed throughout the world. The sale has been approved by the US Securities and Exchange Commission, and the company has mandated Goldman Sachs to find a buyer for the division. While the structure of the deal has not been announced, the debt-equity leverage is around average for private equity deals.
3M has a number of innovative filtration technologies for the pharmaceutical industry. Its Zeta Plus depth filters and 3M Emphaze AEX Hybrid Purifiers offer reliable particle reduction. The company has also been advancing the use of pMDIs to administer macromolecules.
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