3M Sees Fewer, Larger Deals in 2013 as Pipeline Stronger

3M Co., the manufacturer of products including Ace bandages and dental braces, expects to make fewer and larger acquisitions in 2013 as the pipeline for targets is now stronger than in the past years.

Chief Executive Officer Inge Thulin, who took over in February, reiterated today that the company plans spend $1 billion to $2 billion on purchases next year. 3M also gave a 2013 earnings-per-share forecast range with a midpoint that missed the average analysts’ estimate by 1.5 cents.

3M, facing a recession in Europe and slowing growth in Asia, also reaffirmed its 2012 earnings forecast, lowered in October because of what it called the “current economic realities.” The company spent $900 million on its three most recent deals, including about $670 million net of cash on Ceradyne Inc., a maker of ceramics used in energy, aerospace and defense industries.

“You should see as we move ahead slightly bigger than you have seen in the past -- and fewer -- and they will be more strategically linked to our prioritization,” Thulin said of possible deals on a conference call with analysts.

3M fell 0.6 percent to $93.12 at the close in New York. The shares have climbed 14 percent this year.

Earnings will rise to $6.70 to $6.95 a share next year, St. Paul, Minnesota-based 3M said in a statement. That compares with $6.84, the average of 14 estimates compiled by Bloomberg.

The $6.825 midpoint represents an 8.2 percent increase over the 2012 forecast midpoint, which in turn is 5.9 percent higher than in 2011. In October, 3M lowered its 2012 earnings estimate to $6.27 to $6.35 a share.

3M expects sales from existing businesses to rise 2 percent to 5 percent next year, according to the statement. Most of the growth will come from developing markets, which will see gains of 5 percent to 10 percent, the company said.

The manufacturer plans capital expenditures of as much as $1.8 billion next year. Dividend payments will range from $1.65 billion to $1.75 billion and gross share repurchases will be as much as $3 billion, 3M said.


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