18-May-2005 - 3M

3M to Acquire CUNO

Acquisition Broadens 3M's Filtration Platform

3M and CUNO Inc. announced that they have entered into a definitive agreement for 3M's acquisition of CUNO in an all cash merger for $72 dollars per share, valuing the transaction at approximately $1.35 billion including the assumption of $60 million of existing net debt. CUNO is a leader in the design, manufacture, and marketing of a comprehensive line of filtration products for the separation, clarification, and purification of fluids and gasses.

CUNO has become a leader by providing innovative liquid filtration solutions to customers in many of the same industries 3M serves, including industrial, health care, consumer, and transportation. CUNO has demonstrated a strong track record of consistent and impressive growth and profitability, with sales increasing at a compound annual growth rate of more than 9 percent and earnings per share growing at a compound annual growth rate greater than 30 percent during the past ten years.

CUNO products include proprietary depth filters and semi-permeable membrane filters used in a broad range of potable water, health care and fluid processing applications. These products effectively remove contaminants that range in size from molecules to sand particles. CUNO estimates its aftermarket replacement sales at more than 70 percent, which provides a predictable revenue stream.

3M provides a range of primarily air filtration solutions to customers in most of its business segments, leveraging proprietary 3M technologies such as membrane and non-woven. 3M filtration products include Filtrete brand residential and commercial air filters, and Empore brand filtration products used in the health care market.

3M plans to fund the transaction with existing cash. The acquisition is expected to be accretive to 3M's earnings in 2006 and does not change the company's 2005 earnings per share guidance. The acquisition is expected to close in the third quarter subject to regulatory and CUNO shareholder approval and other customary closing conditions.

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