Smiths Group has agreed to sell its airport security scanning division, Smiths Detection, to CVC Capital Partners in a transaction valuing the business at £2bn, according to a report by Bloomberg.
The FTSE-listed engineering group expects net proceeds of about £1.85bn and plans to return a significant portion to shareholders. The move follows a £1bn buyback announced in November as part of a broader restructuring.
Smiths has been streamlining its portfolio to focus on John Crane and Flex-Tek, which supply industrial seals, pipes and related technologies across energy, pharmaceuticals, aerospace and construction. The company has already signed a deal to divest Smiths Interconnect, its cable and wiring arm.
The breakup, unveiled in January after a strategic review and pressure from activist investor Engine Capital, has helped lift Smiths’ shares more than 40% this year. The stock rose as much as 4.9% in London on Wednesday, giving the group a market value above £8bn.
Smiths said the £2bn valuation reflects a multiple of 16.3x on Smiths Detection’s headline operating profit of £122m for the year to July.
