CERNOBBIO, Italy (Reuters) - U.S. conglomerate 3M Co (MMM.N) offered a fair premium for Cogent Inc (COGT.O) and expects an overall pick-up in acquisitions to help boost growth, Chief Executive George Buckley said on Friday.
3M said this week it was buying Cogent for $943 million, or $10.50 a share, a premium of nearly 18 percent for the maker of identification systems used to screen travelers at borders.
A shareholder of Cogent, St Nevan US Ltd, is suing the company’s board, saying the price is too low.
“The stock was trading in the $8 range, we offered in the mid-$10 range, I think it was a fair premium,” Buckley, who is also chairman and president at 3M, told Reuters Insider on the sidelines of the European House business conference.
“We expect to get more value by what we bring to the acquisition, but I think it was a fair price.”
Buckley said the company planned to build up its U.S. operations and is in a good financial position for acquisitions. He said last month 3M may double its budget for acquisitions this year, to about $2 billion.
3M followed the Cogent purchase this week by saying it would pay $230 million to buy Israel’s Attenti Holdings SA, a maker of remote monitoring technology for criminals and care of the elderly.
Buckley said cash-rich companies like 3M were starting to look for acquisitions as the economy starts to turn up and as a way to boost growth.
“I think you’ll see a flurry of activity from a number of people at this moment in time,” he said. “This is very much an approach of one plus one equals two and a half or three, or even four, maybe.”
Buckley said 3M had not talked with Cogent rival L-1 Identity Solutions Inc ID.N. L-1 said last month it was close to completing a deal, months after putting itself up for sale.
Asked if the upturn in U.S. manufacturing numbers this week meant 3M had changed its outlook for the third quarter, he said: ”We were optimistic, we forecast that optimism.
“What I‘m optimistic about is that maybe other people will begin to believe it, in the marketplace perhaps. But the proof of the pudding is in the eating,” he said.
Editing by Greg Mahlich