Bulletin: 3M Co.'s $1 Billion Acquisition Of M*Modal Only Modestly Increases Leverage

NEW YORK (S&P Global Ratings) Dec. 19, 2018--S&P Global Ratings said today that 3M Co.'s (AA-/Stable/A-1+) proposed $1 billion acquisition of health care technology company M*Modal will modestly increase leverage, though it will remain below our 2x downside threshold under the current rating. The company expects the acquisition to close in the first half of 2019, subject to customary closing conditions and regulatory approvals. We expect that 3M will fund the transaction with a mix of cash, commercial paper, and new debt. Including the proposed transaction, we expect 3M's leverage to remain in the high-1x area over the next 12-18 months. This incorporates our expectation that the company will generate strong free cash flow above $4 billion in 2018 and

...NEW YORK (S&P Global Ratings) Dec. 19, 2018--S&P Global Ratings said today that 3M Co.'s (##-/Stable/A-1+) proposed $1 billion acquisition of health care technology company M*Modal will modestly increase leverage, though it will remain below our 2x downside threshold under the current rating. The company expects the acquisition to close in the first half of 2019, subject to customary closing conditions and regulatory approvals. We expect that 3M will fund the transaction with a mix of cash, commercial paper, and new debt. Including the proposed transaction, we expect 3M's leverage to remain in the high-1x area over the next 12-18 months. This incorporates our expectation that the company will generate strong free cash flow above $4 billion in 2018 and at least $5 billion in 2019. We anticipate 3M will continue to pursue acquisitions and shareholder returns using the bulk of its free cash flow over the next two years, while maintaining leverage under 2x. As a result, our ratings and outlook...

Bulletin