Johnson Matthey said 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 $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 program 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 program (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.
