3M Acquires Cuno for Nearly $1.3 Billion

[HenryTo]

The bulls will view this as favorable news, as this directly adds $1.3 billion (since this is an all-cash deal) to the liquidity of the stock market. The bears will say that M&A activity usually comes near the top of the stock market. As for me, I view this as ST bullish and will remain bullish until it turns bearish.
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3M Acquires Cuno for Nearly $1.3 Billion
Thursday May 12, 8:36 am ET
3M Acquires Filtration Concern Cuno for Nearly $1.3 Billion in Cash

ST. PAUL, Minn. (AP) -- 3M Co., the maker of Scotch tape and Thinsulate fabrics, on Thursday said it agreed to buy the manufacturer Cuno Inc. for nearly $1.3 billion 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 Meriden, 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 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.

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.