3M Cos. (NYSE: MMM) said Thursday it will pay $810 million to purchase Arizant Inc. in Eden Prairie, Minnesota, a maker of products that help keep patients warm in hospitals, especially during surgeries.
The St. Paul-based manufacturing giant not only makes Scotch tape and Post-It notes, it boasts a sizable healthcare business, including technology to help reduce hospital infections.
One person who’s probably paying special attention to the deal is Scott Augustine, the former CEO of Arizant. Augustine, a prolific medical device entrepreneur, led the company after Arizant bought Augustine Medical Inc. in 2003.
When Investment Rhymes with Canada
Canada has a proud history of achievement in the areas of science and technology, and the field of biomanufacturing and life sciences is no exception.
Augustine invented an air-based warming blanket — a key technology in Arizant’s portfolio that’s now used in hospitals around the world.
Things didn’t end too well for Augustine and Arizant.
A year after Arizant bought his company, Augustine pleaded guilty to reduced charges of defrauding Medicare. He was sentenced to five years probation, banned from Medicare for five years and ordered to pay a $2 million fine. Arizant, by ownership of Augustine Medical, also paid a bunch in fines.
Augustine sued Arizant after his former employer refused to pay millions of dollars in legal fees on grounds that Augustine’s guilty plea proved he acted in bad faith. The case wound up in the Minnesota Supreme Court, which ruled in favor of Augustine.
Since then, Augustine started his own incubator firm, which has produced two companies: Hot Dog LLC and PureZone Technologies. Hot Dog is making a warming blanket to compete with Arizant, and Pure Zone is developing a pillow-based air filtration system for patients who can’t sleep because of allergies.
Perhaps Augustine feels good that a technology he invented helped Arizant fetch a nice price from 3M. I wonder what kind of payday Augustine could’ve received from the deal had he remained CEO of Arizant?
I guess we’ll never know.
