Corning Incorporated (NYSE: GLW) announced today that it has entered into agreements with 3M to purchase substantially all of 3M’s Communication Markets Division in a cash transaction valued at approximately $900 million. The acquisition is expected to close during 2018, subject to customary closing conditions and regulatory approval.
Corning’s Optical Communications segment will acquire approximately $400 million in annual sales of high bandwidth and optical fiber products. The effective enterprise value of the transaction is less than 7 times the Communication Markets Division’s estimated forward-annual adjusted EBITDA, including expected run-rate synergies. Corning expects the transaction to add $0.07-$0.09 to 2019 EPS.
“Corning leads in optical passive components and solutions. This transaction expands both our global market reach and our high-bandwidth portfolio. It also provides new co-innovation opportunities and enhances our ability to serve customers globally,” said Clark S. Kinlin, executive vice president, Corning Optical Communications. “As the industry’s only true end-to-end manufacturer and supplier of optical solutions, we look forward to bringing these two strong organizations together and welcoming a group of outstanding employees.”
The pending acquisition is part of Corning’s multi-year Strategy and Capital Allocation Framework, which is designed to create significant value for shareholders by focusing the company’s portfolio and utilizing its financial strength. A key component of the Framework is the company’s plan to invest approximately $1 billion to $3 billion in acquisitions. When complete, this acquisition will augment Corning’s Optical Communications global market access and expand its broad portfolio of high-bandwidth optical connectors, assemblies, hardware, and accessories for Carrier Networks, Enterprise LAN, and Data Center solutions.
3M’s Communication Markets Division is headquartered in Austin, Texas, and has a dedicated manufacturing facility in Pontchâteau, France, and operations in Hannover, Germany. The acquisition is subject to consultation or information requirements with relevant works councils, as well as customary closing conditions and regulatory approvals.
Forward-Looking and Cautionary Statements
This press release contains “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995), which are based on current expectations and assumptions about Corning’s financial results and business operations, that involve substantial risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include: the effect of global political, economic and business conditions; conditions in the financial and credit markets; currency fluctuations; tax rates; product demand and industry capacity; competition; reliance on a concentrated customer base; manufacturing efficiencies; cost reductions; availability of critical components and materials; new product commercialization; pricing fluctuations and changes in the mix of sales between premium and non-premium products; new plant start-up or restructuring costs; possible disruption in commercial activities due to terrorist activity, armed conflict, political or financial instability, natural disasters, adverse weather conditions, or major health concerns; adequacy of insurance; equity company activities; acquisition and divestiture activities; the level of excess or obsolete inventory; the rate of technology change; the ability to enforce patents; product and components performance issues; retention of key personnel; stock price fluctuations; and adverse litigation or regulatory developments. These and other risk factors are detailed in Corning’s filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the day that they are made, and Corning undertakes no obligation to update them in light of new information or future events.
Digital Media Disclosure
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About Corning Incorporated
Corning (www.corning.com) is one of the world's leading innovators in materials science, with a 166-year track record of life-changing inventions. Corning applies its unparalleled expertise in glass science, ceramic science, and optical physics along with its deep manufacturing and engineering capabilities to develop category-defining products that transform industries and enhance people's lives. Corning succeeds through sustained investment in RD&E, a unique combination of material and process innovation, and deep, trust-based relationships with customers who are global leaders in their industries.
Corning's capabilities are versatile and synergistic, which allows the company to evolve to meet changing market needs, while also helping our customers capture new opportunities in dynamic industries. Today, Corning's markets include optical communications, mobile consumer electronics, display technology, automotive, and life sciences vessels. Corning's industry-leading products include damage-resistant cover glass for mobile devices; precision glass for advanced displays; optical fiber, wireless technologies, and connectivity solutions for state-of-the-art communications networks; trusted products to accelerate drug discovery and delivery; and clean-air technologies for cars and trucks.