Johnson Controls International plc
has reached an agreement to sell its Scott Safety
business to 3M
for $2 billion.
Scott Safety had about $570 million in revenue over the trailing 12 months. It designs and manufactures respiratory protection, gas and flame detection, thermal imaging and other products used by fire services, law enforcement, industrial, oil and gas, chemical, armed forces and homeland defense professionals.
Johnson Controls International is a multi-industrial firm based in Ireland but has its North American operational headquarters in Glendale. The company was formed when Glendale-based Johnson Controls Inc. completed its merger with Ireland-based Tyco International plc in September
. The safety business, based in Monroe, North Carolina, has about 1,500 employees around the world.
The divestment of Scott Safety, which was part of Tyco, is expected to generate $1.8 billion to $1.9 billion in net cash proceeds, which Johnson Controls will use in part to pay down $4 billion in merger-related debt.
"We are pleased to announce the sale of Scott Safety to 3M in a mutually beneficial strategic transaction," said Alex Molinaroli, Johnson Controls chairman and chief executive officer. "Consistent with our priority to focus the portfolio on our two core platforms of Buildings and Energy, we continue to execute on our strategic plan, which positions us to deliver a 12 percent to 15 percent earnings per share CAGR by fiscal 2020."
St. Paul, Minnesota-based 3M said the acquisition would be integrated with its Personal Safety Division, which offers respiratory, hearing and fall protection products for safety and health workers.
“Personal safety is a core growth business within the 3M portfolio,” said Inge G. Thulin, 3M chairman, president and chief executive officer. “This acquisition leverages our fundamental strengths in technology, manufacturing, global capabilities and brand, and builds upon recent portfolio actions within our Safety and Graphics business to position it for long-term success.
The transaction is expected to close in the second half of the year, pending regulatory approval.