3M’s health care spinoff becomes Minnesota’s newest public company on April 1

Minnesota’s newest public company will make its debut April 1, nearly two years after 3M first announced it would spin off its health care business.

Solventum, the spinoff’s name, will employ more than 20,000 people and remain headquartered at 3M Center in Maplewood, at least for now.

3M set the date for Solventum’s creation in a 300-page securities filing Wednesday that offered many other details about the makeup of the new health care-focused firm.

Solventum will take on $8.6 billion in debt, partly to pay 3M for transferring the health care business into the new company.

Ratings agency Fitch recently predicted the spinoff would net 3M up to $12 billion in the long term, much of which it will use to pay legal settlements. 3M plans to hold on to nearly 20% of Solventum stock and sell it off over several years. 3M shareholders will receive an as-yet-undetermined number of shares of Solventum in what is meant to be an initial tax-free distribution in April.

When 3M announced the spinoff in summer 2022, the company had planned for its completion by the end of last year. The April 1 date is still subject to 3M board approval and other conditions, the company said.

3M’s health care business had $8.2 billion in revenue last year, about a quarter of 3M’s total sales.

Both 3M and Solventum hope to gain greater focus by separating.

“As we become an independent company, we will be better suited to recruit experienced talent from health care, operate with increased agility as a smaller, more nimble organization, enhance our focus within our portfolios and allocate our capital and resources to drive our growth strategies,” Solventum CEO Bryan Hanson wrote in the filing.

Solventum will still be highly reliant on 3M, however, as 3M is “the sole source of supply for certain chemical materials and inputs” that together led to $3 billion in sales last year, according to the Securities and Exchange Commission filing. At the same time, “Solventum will no longer benefit from 3M’s established brand and reputation,” the filing said.

Several of the company’s four core business segments will have new names. The largest, MedSurg (formerly medical solutions), accounts for 56% of revenue. Dental Solutions (formerly oral care solutions); Health Information Systems; and Purification and Filtration are the others.

The company sees a total addressable market of $93 billion with global growth potential of 4% to 6% annually over the next few years.

Solventum will operate out of 273 facilities across more than two dozen countries. About 56% of 3M health care sales last year were domestic and the rest international.

“We believe Solventum is a proven global leader in large, diverse and growing markets with a wide portfolio of strong, reputable brands and long-standing customer relationships,” Hanson wrote. “We are proud of the strengths and long heritage of innovation our team brings to Solventum from its history with 3M and plan to build on those strengths.”