3M to sell drug delivery business to Altaris Capital for $650m

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US industrial conglomerate 3M has signed a cash-cum-stock deal worth around $650 million to sell substantially all of its drug delivery business to an affiliate of Altaris Capital Partners for about $650 million, as per the latest pharma acquisition news.

As per the terms of the deal, the total consideration includes cash, an interest-bearing security, and a 17% non-controlling stake in the new drug delivery company.

Based in St. Paul, Minnesota, the business involved in the deal is said to be a major player in drug delivery that works with pharmaceutical and biotech companies to develop and manufacture pharma products using inhalation, microneedle, transdermal, and conventional drug delivery technologies. It has annual global sales of around $380 million.

The sale doesn’t involve the transdermal drug delivery components business, which will be retained by 3M.

3M to sell drug delivery business to Altaris Capital for $650m

3M to sell drug delivery business to Altaris Capital for $650m. Photo courtesy of 3M.

Michael Roman – 3M chairman and CEO said: “The drug delivery business is a leading provider of transdermal and inhalation delivery technologies.

“This transaction will allow us to focus more resources on our core health care business as well as retain a share in the value of the drug delivery business as it grows over the coming years.”

Around 900 employees of 3M who mainly support the divested drug delivery business are likely to join the new company following the close of the sale.

George Aitken-Davies – Altaris Capital Partners Managing Director said: “We are excited to be partnering with 3M and the drug delivery team to support the future growth of the company.

“We believe the business is well positioned to build on its successful track record as a leading provider of drug delivery technologies.”

The deal, which is subject to regulatory approvals and customary closing conditions, is expected to be wrapped up in H1 2020.

Morgan Stanley & Co. is the financial advisor to 3M for the deal, while Cleary Gottlieb Steen & Hamilton is the legal counsel. For Altaris, its legal counsel in the deal is Schiff Hardin.

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