Cogent Inc. (COGT) climbed 20.81 percent to $10.77 by 11:00 am ET, the most intraday since February 2008, after industrial conglomerate 3M Co. (MMM) said it agreed to buy the maker of biometric devices for $943 million, or $10.50 a share – nearly 18% above Cogent’s closing price on Friday.
3M, who had $3.02 billion of cash and cash equivalents as of June 30, said it plans to start a tender offer for all shares of Cogent, based in Pasadena, Calif., within 10 business days.
“Cogent Systems has done a tremendous job establishing a strong presence in the biometric industry,” said Mike Delkoski, VP and general manager, 3M Security Systems Division. “Adding Cogent Systems’ products to our business strengthens our product portfolio and services in high security credential issuance and authentication systems and positions 3M’s business in law enforcement applications.”
Cogent’s board of directors already has agreed to the deal and is recommending that shareholders accept it.
Ming Hsieh, Cogent’s founder and CEO, said the acquisition would help 3M compete in border control and law enforcement markets.
“3M can accelerate our growth and extend our reach in global border control markets, law enforcement and commercial applications,” Hsieh said in a statement. “Together, we’ll deliver a broader range of..solutions to the security industry and to our customers.”
On a GAAP reported basis 3M expects the purchase to dilute its earnings by 9 cents to 10 cents per share over the first 12 months after closing.
Shares in Cogent were up 22.38%, or $1.99 at $10.91 — 41 cents above 3M’s offer — on the Nasdaq Stock Market at midday Monday, suggesting the market considers a rival bid possible.
COGT shares have traded between $7.96 and $11.33 over the last 52 weeks.