3M Co., the maker of Scotch tape and Thinsulate fabrics, on Thursday said it agreed to buy Cuno Inc. for nearly $1.3 billion in a move that broadens its line of filtration equipment.
Meriden, Conn.-based Cuno has agreed to be acquired for $72 per share in cash, a 31 percent premium to its closing price of $54.82 on Wednesday. Cuno shares surged $14.80, or 27 percent, to $69.62 during premarket activity.
3M will also assume about $60 million in net debt, 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.
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 percent, 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.