3M intends to spin off its Health Care business to create two public companies.

The New 3M will remain a material science company for the industrial and consumer markets. Heath Care aims to be a diversified healthcare technology company with focus on wound care, healthcare IT, oral care, and biopharma filtration.

3M Health Care accrued about $8.61 billion in sales last year. It’s currently expected to be spun off with net leverage of about 3x – 3.5x EBITDA, and 3M will retain a 19.9% stake in Health Care, to be monetized over time.

3M aims to complete the spinoff by the end of 2023.

“Today’s actions advance our ability to create value for customers and shareholders,” 3M chairman and CEO Mike Roman told the press. “Disciplined portfolio management is a hallmark of our growth strategy. Our management team and board continually evaluate the strategic options that will best drive long term sustainable growth and value. The decision to spin off our Health Care business will result in two well-capitalized, world-class companies, well positioned to pursue their respective priorities.”

The company also plans to complete separation of its Food Safety business via split-off transaction by September 1 of this year.

Article source: MPO