Johnson Matthey Plc
This announcement contains
inside information
LONDON, March 20, 2024 /PRNewswire/ -- Johnson Matthey
Plc (JM) announces that it has signed a definitive agreement to
sell 100% of its Medical Device Components business (MDC) to
Montagu Private Equity (Montagu) for cash consideration of
US$700 million (£550 million) on a
cash free debt free basis.
The MDC business produces components for medical device
manufacturers globally with a focus on precious metal alloys and
nitinol. The business serves a global customer base and operates
manufacturing sites in the USA
(San Diego), Mexico (Mexicali), and Australia (Tullamarine).
With our sale of MDC announced today and a separate sale of our
Battery Systems business, we have concluded the divestment
programme for our Value Businesses that was originally announced in
May 2022 as one of our key strategic
objectives. This brings the aggregate net proceeds from the
divestment of Value Businesses to significantly more than our
target of £300 million.
In line with our stated capital allocation policy, it is the
board's current intention to return to shareholders £250 million of
the net proceeds of the sale of MDC by way of an on-market share
buyback programme (conditional upon completion). The balance of the
net proceeds will be used to repay some of JM's existing debt and
for other general corporate purposes.
The sale proceeds will be payable in cash at completion, which
is subject to regulatory approval. The transaction is expected to
complete around Q3 2024.
Liam Condon, Chief Executive,
Johnson Matthey, commented:
"Today's announcement represents a significant milestone in our
disposals programme announced in May
2022. As a JM business, MDC has delivered technological
differentiation and good growth to the critical health sector. We
welcome Montagu's plans to continue the investment and growth plans
at MDC.
"We are pleased that this concludes our Value Businesses
disposal programme which will deliver benefits to JM shareholders
in terms of value realisation, simplification and increased focus
on our growth businesses, where JM has a proven ability to
win."
About Johnson Matthey:
Johnson Matthey is a global
leader in sustainable technologies. For over 200 years we've used
advanced metals chemistry to tackle the world's biggest challenges.
Many of the world's leading energy, chemicals and automotive
companies depend on our technology and expertise to decarbonise,
reduce harmful emissions and improve their sustainability. And now,
as the world faces the challenges of climate change, energy supply
and resource scarcity, we're actively providing solutions for our
customers. Through inspiring science and continued innovation,
we're catalysing the net zero transition for millions of people
every day.
About Montagu:
Montagu is a leading mid-market private equity firm, committed
to finding and growing businesses that make the world work.
Focussing on businesses with a must-have product or service in a
structurally growing marketplace, Montagu brings proven growth
capabilities to help companies achieve their ambitions and unlock
their full potential. Montagu specialises in carve-out and other
first time buyout investments and has deep expertise in five
priority sectors: Healthcare, Financial Sector Services, Critical
Data, Digital Infrastructure and Education. ESG forms an integral
part of its strategy, and its commitment to responsible investment
is fully integrated into its investment and value - creation
process. Montagu partners with companies with enterprise values
between €20 0 million and €1 billion and has €11bn assets under
management.
For additional information on Montagu, visit www.montagu.com
The person responsible for the release of this announcement is
Simon Price, General Counsel and
Company Secretary of Johnson Matthey Plc
Goldman Sachs International acted as exclusive financial adviser
to Johnson Matthey on this
transaction.
Notes:
- Value Businesses divestment programme set out in May 2022 as part of the group's strategic
milestones includes the sale of Diagnostic Services, Battery
Systems and Medical Device Components.
- The sale agreement is in respect of the whole of
Johnson Matthey's Medical Device Components business,
including assets, technology and licences, as well as related
assets.
- This transaction constitutes a Class 2 transaction for
Johnson Matthey under the UK Listing Rules.
- The gross assets that are the subject of this transaction
amounted to £60 million as at 30th September
2023. For the financial year ended 31st March 2023, these assets generated reported
profit before tax of £17 million.
- Proceeds after tax and divestment costs for the disposal
of MDC are expected to be c.£450 million.
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