Johnson Matthey PLC (LSE:JMAT) announced the sale of its Health business to Altaris Capital Partners for £325mln.
The company will retain approximately a 30% stake from which it expects to “realise significant additional future value,” a statement said.
Completion is expected in mid-2022
Health is a developer and manufacturer of specialist and complex active pharmaceutical ingredients for pharma and biotech customers. The buyer, Altaris is a healthcare investment firm, which focuses exclusively on building healthcare companies that deliver value through innovation and efficiency.
Health's sale price of £325mln represents an implied transaction multiple of 9.8x underlying EBITDA of £33mln for the 12 months to 30 September 2021.
JM will receive £150mln cash on completion. An additional £50mln payment will be contingent on tachieving certain performance targets in 2023 and 2024.
A further £50mln will be structured as a vendor loan note, which will be deferred until a future exit, and will accrue interest at a rate of 8 pct per annum until this point, compounding quarterly, the company said.
The sale is expected to give rise to an accounting loss on disposal/impairment of around £200mln.