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3M acquires filtration concern Cuno for nearly US$1.3 billion in cash

Canadian Press

Thursday, May 12, 2005

ST. PAUL, Minn. (AP) - 3M Co., the maker of Scotch tape and Thinsulate fabrics, has agreed to buy the manufacturer Cuno Inc. for nearly $1.3 billion US in a move that broadens its line of filtration equipment.

3M will also assume about $60 million in net debt in the deal for Cuno of Meridien, Conn., and said it plans to fund the acquisition with existing cash. The transaction does not change its 2005 guidance but is expected to boost earnings in 2006, the company said.

Under the deal, Cuno has agreed to be acquired for $72 per share in cash, a 31 per cent premium to its closing price of $54.82 on Wednesday. Cuno shares surged $14.80, or 27 per cent, to $69.62 during premarket activity.

Sales at Cuno, which makes products used to filter and purify fluids and gasses, have been growing at a compound annual rate of more than 9 per cent, 3M said. For the year ended last October, Cuno earned $1.92 per share on $351.6 million in sales.

3M said its current air filtration business "totals well over $1 billion," and views Cuno's liquid filtration business as complementary.

The deal is expected to close in the third quarter, pending approval from regulators and Cuno shareholders.