Solventum sells purification business for $4.1B to pay down debt

3M health care spinoff Solventum is selling its purification business to Thermo Fisher Scientific for $4.1 billion in cash to pay down its billions in outstanding debt.

Solventum CEO Bryan Hanson said in a news release that the sale, expected to wrap up by the end of 2025, is part of the Minnesota-based company’s transformation plan and “follows a thorough analysis of the value and strategic alignment of our businesses.”

“This transaction will enhance our strategic focus and key metrics while reducing leverage and significantly strengthening our balance sheet,” Hanson said. “It also enables us to invest in the innovation, programs and talent we need to execute our mission and deliver shareholder value.”

Solventum was spun out of 3M on April 1, and is moving its headquarters from Maplewood to Eagan in coming years. The company took on $8.6 billion in debt partly to pay 3M for transferring the health care business into the new company.

The business segment selling purification products used in commercial spaces and homes generated $238 million in sales in the most recent quarter, which was $10 million less than the quarter a year before, when it was still a part of 3M. Massachusetts-based Thermo Fisher said in a press release the business segment operates globally with approximately 2,500 workers.

The sale comes as Solventum, Minnesota’s newest public company, is slashing its workforce and facing decreasing profits.

Overall, Solventum reported adjusted net profits of $285 million on $2 billion in sales for the quarter that ended Sept. 30. Adjusted profits fell more than 40% compared to the performance of the same four divisions when they were a part of 3M.

In December, Solventum launched a new round of layoffs via a video message to its employees. The company has not said how many employees lost their jobs.

Asked if the sale announced Tuesday could result in more job cuts, Solventum directed the Minnesota Star Tribune to a statement Hanson made in the news release:

“Solventum is committed to ensuring a smooth transition for employees, customers and other stakeholders, and we are confident that Thermo Fisher will provide the Purification & Filtration business ... the strategic investment and resources needed for sustaining growth and delivering customer solutions.”

A Thermo Fisher company spokesperson said in an email, “We look forward to the talent that Solventum’s purification & filtration business will bring to Thermo Fisher once the acquisition closes by the end of 2025, following regulatory approvals and closing conditions.”

Solventum’s stock was up roughly 10% Tuesday morning after the announcement. The company expects the sale to generate $3.4 billion in net proceeds it will use primarily to pay down debt. For the quarter ending September 30, it recorded $7.8 billion in long-term debt.

In August, CEO Bryan Hanson told investors that buying and selling parts of the business to optimize the portfolio around high-growing products will be a key strategy for the company’s “transformation and turnaround.”

Thermo Fisher, a massive biotechnology company, said in a news release the purification business complements its bioproduction business with a portfolio of cell culture media and single-use technologies, expanding its capabilities to develop and manufacture biologics.

“The addition of Solventum’s business is an outstanding strategic fit with our company and will create significant value for our customers and shareholders,” Thermo Fisher CEO Marc Casper said in a press release. “Solventum’s portfolio of solutions will be valued by our customers, and further demonstrate our disciplined capital deployment strategy, which has an excellent track record of creating shareholder value.”