(Alliance News) - Johnson Matthey PLC on Friday said it has sold its majority stake in its Health unit to healthcare-focused investment firm Altaris Capital Partners LLC.
The London-based chemical and technology company said it sold the business for an enterprise value of GBP325 million.
Johnson Matthey will retain approximately a 30% equity stake in Health from which it said it expects to realise "significant additional future value".
Completion of the sale is expected in mid-2022 and will lead to an accounting loss of GBP200 million for the company.
Johnson Matthey is set to be demoted from the FTSE 100 index to the FTSE 250 on Monday next week as part of the quarterly index review. The company's shares have suffered since announcing plans in November to quit its once-promising Battery Materials business.
Johnson Matthey explained that the Health unit operates in "different markets from the rest of the group" and a strategic review found it is "not core" to the company.
Chief Executive Robert MacLeod added while the unit has good long-term prospects, the business required "significant" capital investment as near term trading had been "challenging".
In the financial year that ended March 31, the Health unit delivered sales of GBP237 million and underlying operating profit of GBP31 million. However in the first half of the current financial year, the business suffered an underlying operating loss of GBP4 million on GBP83 million in sales.
MacLeod next year will step down after eight years as CEO. Liam Condon will join from Bayer AG to take over from March 1.
Shares in Johnson Matthey were up 0.3% at 1,998.00 pence on Friday morning in London.
By Heather Rydings; heatherrydings@alliancenews.com
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Johnson Matthey (JMAT)