3M, a US-based manufacturing company, has agreed to sell almost all of its drug delivery business to an affiliate of Altaris Capital Partners for about $650m.

According to 3M, the total consideration includes cash, an interest-bearing security, and a 17% non-controlling stake in the new company that will hold the divested drug delivery business.

The business being sold is headquartered in St. Paul, Minnesota and has annual global sales of around $380m. It partners with pharmaceutical and biotech companies for developing and manufacturing pharmaceutical products based on its transdermal, inhalation, microneedle, or conventional drug delivery technologies.

3M chairman and CEO Michael Roman said: "The drug delivery business is a leading provider of transdermal and inhalation delivery technologies.

"This transaction will allow us to focus more resources on our core health care business as well as retain a share in the value of the drug delivery business as it grows over the coming years."

The transaction does not include 3M’s transdermal drug delivery components business.

The transaction will see about 900 3M employees, who are primarily engaged with the divested business, join the new company after completion of the sale.

3M said that it expects to gain $0.45-$0.50 per share from the sale, net of actions associated with the divestiture. After completion of the deal, 3M’s ownership stake in the new drug delivery company will be reported using the equity method of accounting.

Altaris Capital Partners managing director George Aitken-Davies said: "We are excited to be partnering with 3M and the drug delivery team to support the future growth of the company.

"We believe the business is well positioned to build on its successful track record as a leading provider of drug delivery technologies."

Subject to regulatory approvals and customary closing conditions, the deal is anticipated to be completed in the first half of 2020, said the parties.

New York-based Altaris Capital Partners is an investment firm, which exclusively focuses on the healthcare industry. The investment firm, which manages $2.5bn of equity capital, had invested in healthcare firms like cmp pharma, JDS Pharmaceuticals and OsoBio among others.

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