Neogen Corp., an international food safety company in Lansing, and 3M, a multinational conglomerate corporation in based in St. Paul, Minn., have entered into an agreement in which 3M will separate its food safety business and combine it with Neogen.
The combination creates a leader in the food safety sector with a comprehensive product range and a strategic focus on the category’s long-term growth opportunities. The combined company with have a pro forma revenue of approximately $1 billion.
“This combination will enhance Neogen’s position in this new era of food security, equipping us with an expanded product line that enables us to capitalize on our growing footprint, reaching more customers, more often, while continuing our track record of strong and consistent growth,” says John Adent, president and CEO of Neogen.
“The heightened global focus on food security, sustainability and supply chain solutions around the world presents exciting opportunities for Neogen to be positioned as an innovative leader at the forefront of the growth and digitization of the industry. We’re excited to welcome 3M’s Food Safety employees to the Neogen team, and we’re looking forward to demonstrating the immense benefits of this combination to our customers, employees and shareholders.”
Under the terms of the agreements, which involve a tax-free “Reverse Morris Trust” structure, existing Neogen shareholders will continue to own approximately 49.9 percent of the combined company, and 3M shareholders will receive approximately 50.1 percent. The boards of directors of both companies have unanimously approved the transaction.
“Neogen and 3M share a deep commitment to quality, innovation and customer satisfaction and long histories of industry leadership,” says Mike Roman, chairman and CEO of 3M. “By combining our food safety business with Neogen, we will create an organization well positioned to capture long-term profitable growth.
“This transaction further evolves our strategy, focuses our health care business and benefits our stakeholders, as we actively manage our portfolio to drive growth and deliver shareholder value.”
The combined company will have an expanded product offering in food safety, particularly in indicator testing and pathogen detection areas, which complement Neogen’s existing microbiology lines.
It is expected to possess the breadth and digital capabilities to lead the digitization of the food security industry. The complementary product offerings combined with Neogen’s data-driven analytics approach is designed to create a solution as customers seek innovative partners to increase efficiency and enhance food safety protocols.
The transaction is expected to close by the end of the third quarter of 2022, subject to approval by Neogen shareholders, receipt of required regulatory approvals and the satisfaction of other customary closing conditions.
Adent, and Neogen’s existing management team will continue to lead the combined company. The size of the Neogen board will be increased and two new independent board members to be designated by 3M, who will be appointed at closing.
