3M to Acquire Corning Precision Lens; Technology Will Accelerate 3M's Growth.Business Editors/High-Tech Writers ST. PAUL St. Paul as a missionary he fearlessly confronts the “perils of waters, of robbers, in the city, in the wilderness.” [N.T.: II Cor. 11:26] See : Bravery , Minn.--(BUSINESS WIRE)--Nov. 12, 2002 3M announced today that it has entered into a definitive agreement to acquire Corning Precision Lens Inc., a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Corning Incorporated Corning Incorporated NYSE: GLW is an American manufacturer of glass, ceramics and related materials, primarily for industrial and scientific applications. The company was known until 1989 as Corning Glass Works. , for a gross price of $850 million in cash. Corning Precision Lens is the largest worldwide manufacturer of lens systems for rear projection televisions. "This transaction affirms our strategy of accessing fast-growing markets by acquiring companies with strong market positions and technologies that we can leverage with our own strengths to drive faster long-term organic growth," said W. James McNerney Walter James "Jim" McNerney, Jr., is an American businessman. On June 30, 2005 he was named the CEO of The Boeing Company. Prior to that, McNerney was the Chairman and Chief Executive of 3M. He had been a member of the Boeing board of directors since 2001. , Jr., 3M chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Combining this business with 3M Optical Systems Division will broaden our technology position in the global display industry." "Adding Corning Precisions Lens' technology for rear projection televisions to 3M's full spectrum of display technologies enhances our business, and will accelerate our growth in the current and next generation consumer television applications," said Andy Wong Andy Wong can mean the following people:
3M believes display components represent a multibillion-dollar growth opportunity. Digital videodiscs See DVD. (DVDs) and high definition televisions (HDTVs) are driving the growth in this industry as more consumers purchase large-screen, rear-projection TVs to create a home theater An audio/video entertainment center that has a large-screen TV and hi-fi system with three speakers in the front (left, right and center) and left and right speakers in the rear. Starting in the early 1990s, video inputs were added to stereo receivers and preamplifiers. experience. In 2002, CRT-based projection televisions represented 98 percent of unit sales unit sales Sales measured in terms of physical units rather than dollars. Unit sales data are often used by financial analysts when evaluating the health of a company. in the large-screen, rear-projection television segment, which is expected to grow at a 35 percent compound annual growth rate through 2006; LCD televisions are expected to grow at a compound annual growth rate of 56 percent through this same period, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the DisplaySearch Quarterly Worldwide Flat Panel Forecast Report, Q2'02. 3M's expertise in display technology is reflected in its line of Vikuiti brand light management products that include proprietary microreplicated and multilayer display enhancement films for applications in electronic displays, such as LCD televisions, mobile phones, desktop monitors and notebook computers. 3M also supplies touch screens and systems, high-performance projection screens and precision optical components for a wide range of display applications. "We are very excited about our future with 3M. This is a record year for Corning Precision Lens and forecasts from our customers continue to be positive," said Dave Szkutak, president and chief executive officer, Corning Precision Lens Inc. "Our market leadership, financial health and the hard work and dedication of Corning Precision Lens employees have helped make us an attractive business. 3M recognizes this and believes that Corning Precision Lens fits nicely with its many vital and growing businesses." Commenting on the sale, Corning Incorporated's Vice Chairman and Chief Financial Officer Jim Flaws said, "The sale of Corning Precision Lens is part of an overall plan to improve our financial health as we focus on returning to profitability. We will use the proceeds to reduce debt and strengthen our balance sheet, including making an additional contribution to our pension plan." Corning Incorporated said that it would record the results of Corning Precision Lens as a discontinued business starting in the fourth quarter. Employing approximately 1,500 people, Corning Precision Lens currently supplies customers globally from its headquarters in Cincinnati, Ohio “Cincinnati” redirects here. For other uses, see Cincinnati (disambiguation). Cincinnati is a city in the U.S. state of Ohio and the county seat of Hamilton County. . Sales for 2002 are expected to be $260 million. On Sept. 18, Corning Precision Lens announced plans to expand its presence in China to take advantage of this emerging market. China is the world's second largest and fastest-growing geographic market for rear projection televisions. The transaction has been approved by the board of directors of both companies and is subject to customary closing conditions and regulatory approvals. The transaction is expected to close by the end of 2002. Upon completion of the transaction, Corning Precision Lens will become a subsidiary of 3M's Optical Systems Division. The acquisition qualifies for a joint election tax benefit under Section 338(h)(10), which allows goodwill to be fully deductible for tax purposes over a period of 15 years. The tax benefit effectively reduces the purchase price of this acquisition to about $680 million. After consideration of this benefit, the price equates to six times estimated 2002 EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become . The purchase is expected to contribute approximately $0.07 to 3M earnings per share in 2003 after one-time acquisition and transition costs. Pat Campbell, senior vice president and chief financial officer; Bob Burgstahler, senior vice president, business development and corporate services Activities that combine or consolidate certain enterprise-wide needed support services, provided based on specialized knowledge, best practices, and technology to serve internal (and sometimes external) customers and business partners. ; and Andy Wong, division vice president, Optical Systems Division will conduct an investor teleconference at 9 a.m. Eastern Time (8 a.m. Central) today. Investors can access a Webcast of this conference, along with related charts, at http://investor.3M.com. About 3M 3M is a $16 billion diversified technology company with leading positions in consumer and office; display and graphics; electronics and telecommunications; health care; industrial; safety, security and protection services; transportation and other businesses. Headquartered in St. Paul, Minnesota, the company has operations in more than 60 countries and serves customers in nearly 200 countries. 3M, which marks its 100th anniversary this year, is one of the 30 stocks that make up the Dow Jones Industrial Average Dow Jones Industrial Average The best known U.S. index of stocks. A price-weighted average of 30 actively traded blue-chip stocks, primarily industrials including stocks that trade on the New York Stock Exchange. and also is a component of the Standard & Poor's 500 Index. About Corning Incorporated Established in 1851, Corning Incorporated creates leading-edge technologies that offer growth opportunities in markets that fuel the world's economy. Corning Incorporated manufactures optical fiber, cable and photonic Dealing with light (photons). See photon and photonics. products for the telecommunications industry; and high-performance displays and components for television, information technology and other communications-related industries. The company also uses advanced materials Advanced Materials is a leading peer-reviewed materials science journal published every two weeks. Advanced Materials includes Communications, Reviews, and Feature Articles from the cutting edge of materials science, including topics in chemistry, physics, to manufacture products for scientific, semiconductor and environmental markets. Forward-Looking and Cautionary Statements The statements contained in this press release that are not purely historical are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , including statements regarding 3M's and Corning's expectations, beliefs, hopes, intentions or strategies regarding the future. All forward-looking statements included in this press release are based upon information available to the companies as of the date hereof, and the companies assume no obligation to update any such forward-looking statement. Vikuiti is a trademark of 3M. |
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