The Department of Defense issued 25 new contracts on Monday worth a little more than $903 million combined. Of these, the contract won by 3M (NYSE:MMM) subsidiary Ceradyne wasn't the largest, but it was the second largest.
Acquired by 3M late last year for just $670 million, 3M's purchase of Ceradyne is already paying dividends, as the company could win back nearly one-quarter of its purchase price from just one single contract. The contract in question, worth up to $151.2 million to 3M, comes in the form of an option exercise on a contract to supply Enhanced Small Arms Protective Inserts (ESAPI) to the military.
This is the second, and final, of two optional one-year extensions on Ceradyne's original one-year base contract for production of the ceramic armor plates, which are inserted into body armor worn by U.S. soldiers, sailors, airmen, and Marines to improve the armor's effectiveness at stopping small arms fire.
Ceradyne is expected to complete delivery under this option exercise by July 2015.
Editor's note: A previous version of this article was unclear that the contract in question could be worth up to $151.2 million.
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