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Smiths Group PLC on Wednesday said it has agreed to sell Smiths Detection to funds advised by CVC Capital Partners PLC at an enterprise value of £2.0 billion, part of restructuring plans announced in January. The London-based engineering company expects to receive net cash proceeds of around £1.85 billion from the sale of the division to the private equity manager. Smiths Group said the ‘highly attractive valuation’ represents 16.3 times headline operating profit of £122 million and 12.5 times headline earnings before interest, tax, depreciation and amortisation of £160 million for the financial year that ended July 31. The deal value ‘fully reflects the long-term growth and margin expansion prospects of Smiths Detection’, and compares ‘strongly against relevant publicly available benchmarks’, Smiths Group said. Smiths Detection develops and manufactures threat detection and security screening systems for a variety of sectors, including aviation, ports, urban security, and defence. Shares in Smiths Group were up 2.1% to 2,480.00 pence each in London early Wednesday and have risen 39% in the last 12 months. The wider FTSE 100 index was flat on Wednesday. The sale follows the £1.3 billion disposal of Smiths Interconnect, announced in October, part of the revamp outlined in January. This repositions Smiths as a industrial engineering company focused on technologies in flow management and thermal solutions with leading positions in attractive, growing segments and a strong financial profile, according to the company. ‘We are focusing Smiths as a premium industrial engineering company specialising in flow management and thermal solutions, and today’s announcement positions us strongly to deliver enhanced growth and returns,’ said Chief Executive Roland Carter. Smiths intends to return a ‘large portion’ of the net cash proceeds to shareholders, with anything left to be used to invest in ‘organic and inorganic growth for the streamlined Smiths’. In November, Smiths Group announced a £1 billion share buyback, returning most of the proceeds from the Smiths Interconnect sale. Smiths expects the sale of Smiths Detection to complete in the second half of 2026. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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