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3M PAYS BILLIONS TO EXPAND IN MEDICAL PRODUCTS AND ECOMMERCE

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3M PAYS BILLIONS TO EXPAND IN MEDICAL PRODUCTS AND ECOMMERCE

3M has agreed to pay more than $6 billion to acquire Acelity and its KCI subsidiaries, developers and marketers of wound-care products sold through ecommerce and mobile apps as well as account managers.

3M Co., already a major player in B2B ecommerce, is ready to pay $6.7 billion—amounting to its biggest acquisition ever—for a company that will expand its online sales of medical products in an attractive growth market, 3M CEO Mike Roman says.

3M said last week that it had entered into a definitive agreement to acquire the worldwide operations of Acelity Inc. and its KCI subsidiaries, developers and marketers of wound-care products Acelity sells to physicians through ecommerce and mobiles apps as well as account managers. 3M said it plans to pay about $6.7 billion, including $4.4 billion for Acelity’s assets plus the assumption of its outstanding debt. Acelity is owned by a consortium of Apax Funds and affiliates of Canada Pension Plan Investment Board and the Public Sector Pension Investment Board.

“Acelity is an excellent complement to our healthcare portfolio, a leader in improving outcomes and lowering the cost of care,” Roman said on a May 2 conference call about the deal with investment analysts, according to a transcript from Seeking Alpha. “The acquisition will further strengthen our ability to offer even more comprehensive solutions to advance the healing process and improve patients’ lives.”

Acelity’s KCI operations sell products ranging from wound dressings and compression bandages to electronic wound therapy systems. KCI’s MyKCI.com ecommerce site is designed to help physicians access product specifications, including instructions for applying wound-care products, and information on risks related to specific wounds and treatments. Physicians typically also work with KCI account managers and use MyKCI.com to reorder products, a KCI spokesman says.

Acelity’s digital offerings also include its iOn Digital Health platform, which includes a MyWoundHealing mobile app designed to help physicians better interact with patients, provide educational content and reorder would-care supplies.

Roman said Acelity will expand 3M’s products offerings in advanced wound care products, a segment he said is an $8 billion market growing in single-digits, with increasing demand driven in part by an aging population and an expanding middle class. The acquisition, expected to close in the second half of this year, will make Acelity and KCI a part of 3M’s Medical Solutions business.

Acelity had total 2018 revenue of $1.5 billion, Roman said on the conference call. 3M, with about $32.8 billion in 2018 sales, does a significant portion in digital commerce. The company didn’t immediately respond to a request for current ecommerce sales, but in recent years has said ecommerce as a share of total revenue was about 25%, and growing, putting digital commerce on course to grow to more than $10 billion.

“Today, KCI embarks upon a new era in its long history as a pioneer in healthcare,” added R. Andrew Eckert, CEO of Acelity. “Backed by the resources and expertise of 3M, KCI will be able to offer clinicians and patients even more compelling solutions designed to speed healing and improve outcomes.”

Sign up for a complimentary subscription to B2BecNews, published 4x/week, covering technology and business trends in the growing B2B ecommerce industry. B2BecNews is published by Vertical Web Media LLC, which also publishes DigitalCommerce360.com, Internet Retailer and Internet Health Management. Contact B2BecNews editor Paul Demery at [email protected] and follow him on Twitter @pdemery.

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Source: https://www.digitalcommerce360.com/2019/05/06/3m-pays-billions-to-expand-in-medical-products-and-ecommerce/

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