NEWS
JM sells Health , plans to exit from batteries
Johnson Matthey ( JM ) has agreed to sell most of its Health business to Altaris Capital Partners , an investment firm focused on the healthcare industry , for an £ 325 million enterprise value . Completion is anticipated in mid- 2022 , subject to regulatory approvals . The JM board said that it carefully considered various factors in reaching its decision , notably that Health operates in different markets from the rest of the group , and a strategic review had concluded that it was not core . It also noted Altaris ’ strong track record in healthcare , particularly pharmaceuticals . “ Since the firm ’ s founding in 2003 , Altaris has completed 18 platform investments in businesses that develop , manufacture and transport complex medical products ,” JM said . By retaining a 30 % stake , it “ expects to realise significant additional future value as the business grows under Altaris ’ majority ownership ”. JM will receive £ 150 million cash on completion , the same as the capital expenditure it planned for Health over the next three years . An additional £ 50 million will be contingent on hitting targets in the 2023 and 2024 fiscal years , while a further £ 50 million will be structured as a vendor loan note , deferred until a future exit . Outgoing CEO Robert Maclod said that the sale “ is a further step towards simplifying our portfolio ”, which will be increasingly focused on sustainable technologies addressing climate change solutions , such as ‘ circularity solutions ’, hydrogen technologies and decarbonisation of chemicals and fuels . Health has about 1,000 employees and seven development and manufacturing sites . In the year to 31 March 2021 , it had sales of £ 237 million and underlying operating profit of £ 31 million , though 1H fiscal 2021 saw a fall to sales of £ 83 million and an underlying operating loss of £ 4 million . Earlier , following a review , JM concluded that the potential returns from its Battery Materials business “ will
JM is also to sell its Battery Materials business
not be adequate to justify further investment ”. All or parts of it will be sold . Despite strong demand growth , there is very strong competition from other technologies and manufacturers and JM ’ s capital intensity is too high to enable it to compete . Within this field , JM had invested about £ 150 million in R & D into eLNO , a high-nickel cathode material . A 10,000 tonnes / year plant was due to open in Poland in 2024 and a second , larger one was already in the planning stages . The company values the business , which employs 430 , at about £ 335 million . This all raises questions over JM ’ s future strategic direction . The Catalytic Converters business is expected to go into decline with the transition to electric vehicles and batteries had been expected to compensate . JM has also just sold its non-core Advanced Glass Technologies business , which makes glass enamels and precious metal pastes , to Italy ’ s Fenzi Group . Separately but perhaps significantly , JM is among 28 organisations across multiple industries that have joined H2Zero , an initiative to accelerate the use and production of hydrogen . Others involved include BP , Shell , Siemens Energy and Anglo American . The companies have all made pledges to that end and JM ’ s is to invest about £ 1 billion in the research , development and deployment of clean hydrogen technologies by 2030 .
6 SPECIALITY CHEMICALS MAGAZINE ESTABLISHED 1981