Johnson Matthey has agreed to sell its Catalyst Technologies business to Honeywell International for £1.8bn, with the majority of proceeds set to be returned directly to shareholders.
Johnson Matthey shares were 31% higher at the time of writing.
The FTSE 100 chemicals group announced it will return £1.4bn to shareholders following completion of the transaction, equivalent to approximately £8 per share and representing 88% of expected net sale proceeds of £1.6bn.
The disposal, valued at an enterprise value of £1.8bn on a cash and debt-free basis, represents a transaction multiple of 13.3 times EBITDA. Completion is anticipated by the first half of 2026, subject to customary closing adjustments.
Following the sale, Johnson Matthey will be repositioned as a streamlined operation focused on its Clean Air and Precious Metals Services (PGMS) divisions. The company expects this strategic shift to drive sustained cash generation and support ongoing returns to shareholders.
“On behalf of the Board, we are pleased to announce the sale of CT which, together with the refreshed strategy of the Group, represents a strategically and financially compelling proposition for shareholders,” said Patrick Thomas, Chair of Johnson Matthey.
“Today’s transaction realises significant value for shareholders, creating a Group with the core strengths, focus and discipline to deliver strong returns for shareholders into the future.”
The group now anticipates generating at least £250m in free cash flow by the 2027-28 financial year, supported by enhanced operating efficiencies and reduced capital expenditure. Johnson Matthey has committed to annual cash returns of at least £130m for 2025-26, rising to £200m from 2026-27 onwards. The company has become an interesting source of income for investors.
Johnson Matthey also announced full-year results on Thursday. Revenue fell 9% but shareholders will be pleased to see operating profit up 116%.