3M acquires Arizant's patient warming business for $810m
15 Sept 2010
3M has agreed to acquire Arizant Inc. for $810 million in
cash. Arizant is a manufacturer of patient warming solutions designed to
prevent hypothermia in surgical settings. It is majority owned by Court
Square Capital, a New York-based private equity firm.
“Patient warming is a highly strategic adjacency for our business
and integral to infection prevention,” said Debra Rectenwald,
president and general manager, 3M Infection Prevention Division. “In
addition to Arizant’s market-leading products, its rich intellectual
property portfolio and solid technology platforms expand 3M’s
infection prevention offerings and will help to drive growth
internationally, as well as provide a platform of innovative wound
Arizant created the category of forced-air patient warming with
the introduction of Bair Hugger therapy in 1987. The global market
for patient warming is approximately US$1 billion, with the
forced-air warming category expected to grow at about 10% per year.
Arizant products help maintain normal body temperature, known as
normothermia, in more than 20 million surgical patients annually as
part of an effort to help prevent surgical site infections and other
serious complications associated with surgical hypothermia. Numerous
clinical studies demonstrate the effectiveness of these products to
reduce the incident rates of hypothermia. Arizant’s normothermia
technology also has applications in wound healing and will augment
3M’s technology base in this market as well.
Other temperature management products include the Bair Paws
patient-adjustable warming system, the world’s first warming gown
designed for perioperative use, and the Ranger blood and fluid
warming systems, a market leader in dry-heat blood and fluid
3M’s infection prevention business helps hospitals reduce
healthcare-associated infections. Its wide variety of products and
systems for controlling the risk of infection includes applications
for sterilization and monitoring, hand hygiene, perioperative preps,
and surgical drapes.
“Arizant and 3M together are a natural fit,” said Gary Maharaj,
president and CEO, Arizant. “Arizant's product development and
commercialization capabilities will draw on the strength of 3M’s
global resources in healthcare and its deep technology expertise to
provide solutions that help prevent perioperative hypothermia around
Maharaj further said, “As we prepare for this new chapter, we
also appreciate the guidance of Court Square, our lead investor.
Their deep understanding of our business and industry helped us
successfully execute on our growth strategy over the past several
years and apply our unique technologies to this important market.”
On a GAAP reported basis, 3M estimates the acquisition to be
$0.03 dilutive to earnings in the first 12 months following
completion of the transaction. Excluding purchase accounting
adjustments and anticipated integration expenses, 3M estimates the
acquisition to be neutral to earnings over the same period. First
year EBITDA, excluding purchase accounting and integration costs, is
expected to be approximately 35 percent-to-sales.
Arizant employs 375 people in the U.S., United Kingdom, Germany,
France, Spain, Austria, Belgium and Japan. Sales for 2010 are
expected to be approximately $200 million. The transaction is
expected to be completed in the fourth quarter, subject to customary
closing conditions and regulatory approvals.
Arizant is majority-owned by Court Square Capital, a private
equity firm based in New York.