Diversified manufacturer 3M Co. (MMM) on Monday announced it would buy advanced ceramic products maker Ceradyne Inc. (CRDN) for about $860 million in an all-cash trasnaction.
The $35 per-share purchase price represents a 43% upside over CRDN’s Friday closing price of $24.43. Minus cash, cash equivalents, short-term investments and debt acquired, the deal is worth around $670 million.
A 3M spokesperson commented, “The combination of Ceradyne and 3M will enable new technologies and innovation for uniquely tailored materials requiring advanced ceramics.” The deal wil begin to positively impact 3M’s earnings within the first twelve months after completion, the company said.
Ceradyne, based in Cosata Mesa, CA, makes ceramic armor and powders used in military, automotive, and industrial applications.
3M shares were mostly flat in premarket trading Monday.
The Bottom Line
Shares of 3M (MMM) have a 2.55% dividend yield, based on Friday’s closing stock price of $92.42. The stock has technical support in the $85 price area. The shares are trading near all-time highs.
3M Co. (MMM) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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