Asahi Kasei to acquire Polypore in deal valued at $3.2 billion

13:17 PM | February 23, 2015 | Deepti Ramesh

Asahi Kasei has reached an agreement to acquire Polypore International (Charlotte, NC) in a deal that values Polypore at $3.2 billion. Asahi Kasei will retain Polypore’s energy storage business, a maker of polymer membranes that separate the cathode and anode in batteries. As part of the deal, 3M (St. Paul, MN) will acquire the assets of Polypore’s separations media business, which produces membranes and membrane modules used in hemodialysis, blood oxygenation, plasmapheresis, other medical applications, for about $1 billion immediately prior to the acquisition of Polypore by Asahi Kasei. Polypore’s energy storage business had sales of $443 million for the 12-months ended 30 June 2014. The separations media business being sold to 3M had sales of $206 million for the same period. 

Asahi Kasei will pay $60.50/share in cash, a premium of about 24% over the average share price for the 20 trading days through 20 February, Polypore says. The transactions have been approved by the boards of directors of Asahi, 3M, and Polypore and are subject to certain customary regulatory and Polypore shareholder approvals. Both transactions are conditioned on 3M’s transaction with Polypore closing immediately prior to the closing of Asahi’s transaction with Polypore.

“We look forward to combining our respective strengths in battery separator technology, achieving new innovations that contribute to solutions to the world’s environmental and energy challenges,” says Toshio Asano, president and representative director of Asahi Kasei. Polypore is a strong fit with Asahi Kasei’s electronic materials business, led by its Hipore lithium-ion (Li-ion) battery separator with applications in energy storage for both consumer electronics and automotive applications. The deal positions it well to meet the need for high-performance materials targeting energy storage applications, particularly in automotive applications, Asahi Kasei says. Further growth is expected from the increasing need for stationary energy storage systems to enable more efficient use of renewable energy, Asahi Kasei says. 

Polypore has Li-ion battery separator plants in China, South Korea, and the United States. Combining the two companies's Li-ion battery separator businesses will enable the development of more sophisticated products, Asahi Kasei says. The addition of Polypore’s lead-acid battery separator business, which has production plants in China, France, Germany, India, Thailand, and the United States, will reinforce Asahi’s energy storage material businesses as a supplier of a wide range of materials that meet diverse energy solution needs, Asahi says.

“Polypore’s separations media business is an outstanding business that will expand our opportunities in many large and attractive segments,” says Inge Thulin, 3M chairman, president, and CEO. “The acquisition of this ultrafiltration membrane technology will enhance 3M’s core filtration platform and help generate new growth opportunities across the company,” Thulin says. Filtration is a priority technology platform for 3M, the company says. Customers increasingly require higher-performance ultrafiltration that membrane technology delivers, particularly in life sciences and biopharmaceutical segments, 3M says. The addition of Polypore’s separations media business will add new technology capabilities to complement 3M’s existing filtration business in life sciences, industrial, water treatment, electronics, and food service.

Bank of America Merrill Lynch acted as financial adviser, and Jones Day acted as legal adviser to Polypore. Mitsubishi UFJ Morgan Stanley Securities acted as financial adviser, and Cleary Gottlieb Steen & Hamilton acted as legal adviser to Asahi Kasei. Centerview Partners acted as financial adviser, and Hogan Lovells acted as legal adviser to 3M.