Johnson Matthey – Health Business Joins The Chopping Block

Published on

Following a strategic review, Johnson Matthey PLC (LON:JMAT) announced the sale of their Health business to Altaris Capital Partners for a total of £325m. The group’s expecting £150m in cash on completion, whilst retaining a 30% stake in the business. There’s another £50m contingent on performance targets and a further £50m as a deferred debt instrument.

Get The Full Henry Singleton Series in PDF

Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

Q3 2021 hedge fund letters, conferences and more

The sale’s expected to give rise to a loss on disposal in the region of £200m and is expected to close in mid-2022 following regulatory approval.

Robert MacLeod, Chief Executive of JM, said: “Health operates in different markets from the rest of JM, and we believe Altaris is the best partner to drive its future value.”

The shares were broadly flat in early trading.

More Loses For Johnson Matthey

Matt Britzman, Equity Analyst at Hargreaves Lansdown:

“More news from Johnson Matthey today, and it’s another round of trimmings for the business. This time it’s the Health business, which the group’s expecting to take a £200m loss on when the sale completes next year. Truth be told, the Health business looked like the odd one out and that’s exactly why it’s being booted. It’s been loss making this year, capital intensive and far from the markets JMAT’s core businesses operate in.

Having recently exited the battery scene in surprising fashion, this news compounds the strategy to strip back to basics. The good news is that the core business is actually very profitable and catalytic converters, where it makes money, won’t disappear overnight. But the new electric world is gathering pace, and the clock’s ticking to find new growth opportunities.

A new CEO at the helm, with a cash hoard at his disposal, means the group can pounce on new opportunities. But as JMAT’s proven already, it’s not easy to embark on a new business and for the moment at least, the group looks out of ideas.”

About Hargreaves Lansdown

Over 1.67 million clients trust us with £138.0 billion (as at 30 September 2021), making us the UK’s number one platform for private investors. More than 98% of client activity is done through our digital channels and over 600,000 access our mobile app each month.