North Carolina-based filtration company Polypore International Inc. (NYSE: PPO) has signed a definitive agreement with Japan’s Asahi Kasei under which the high-tech filtration firm will be acquired for $60.50 per share in cash. The total value of the deal is $3.2 billion, including debt, and represents a premium of 24% over the volume weighted average share price for the past 20 days up to February 20.
Immediately prior to the merger, 3M Co. (NYSE: MMM) will pay Asahi Kasei approximately $1 billion to acquire Polypore’s separations media business. The closing of the transactions is subject to shareholder and regulatory approvals, and both transactions have to be approved or neither will be completed.
Polypore’s headline product is a specialized membrane used in the lithium-ion batteries that go into batteries for Tesla Motors Inc. (NASDAQ: TSLA) as well as batteries used by Toyota, GM and Volkswagen. That part of Polypore’s business will go to Asahi Kasei, which already makes and sells a similar product.
3M’s CEO said:
Polypore’s Separations Media business is an outstanding business that will expand our opportunities in many large and attractive segments. The acquisition of this ultrafiltration membrane technology will enhance 3M’s core filtration platform and help generate new growth opportunities across the company.
In the first 12 months following the transaction, 3M expects a negative impact of $0.03 per share on a GAAP basis. Adjusted to exclude certain items, 3M estimates a positive impact of $0.04 per share in the same period. 3M will pay for the separations media business with cash, “the majority of which will come from outside the U.S.”
Shares of Polypore were up about 13% in Monday’s premarket trading, at $59.95 in a 52-week range of $29.59 to $54.40.
3M shares traded down fractionally to $168.05, in a range of $129.70 to $168.27. The high was set last Friday.
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