The Electronic Materials
Division (EMD) is a leading supplier of advanced
interconnect products and services and semiconductor
materials to the global electronics industry. In
the year ended 31st March 1999 the Division had sales
of £414.7 million and reported an operating profit
of £22.1 million. Net operating assets at 31st March
1999 were £262.0 million.
Following the strategic
review announced late last year, Johnson Matthey
stated its intention to focus on its core activities
where it has product leadership and a strong market
position. Credit Suisse First Boston were appointed
to advise on the options for maximising shareholder
value from EMD, including the possibility of an IPO,
and this has concluded with the sale announced today.
Whilst the whole
business of the Division is being sold, certain peripheral
assets, mostly property, with a book value of £14
million, will be retained. Consequently, the total
value placed on the Division by this transaction
is approximately £434 million.
The sale will generate
a gain of approximately £153 million compared with
book value. After writing back £126 million of goodwill
it will give rise to an exceptional profit of approximately £27
million in Johnson Matthey's results for the current
financial year.
Part of the proceed
of sale will be used to repay group borrowings. Johnson
Matthey will also be reviewing opportunities for
reinvesting the proceeds in acquisitions in the group's
core businesses and for returning capital to shareholders.
The transaction is
subject to approval by the shareholders of Johnson
Matthey and to regulatory approval in the United
States. A circular to Johnson Matthey shareholders
containing further details of the transaction and
a notice convening an extraordinary general meeting
will be posted shortly.
Commenting on the
transaction, Chris Clark, Chief Executive of Johnson
Matthey said:
"When we announced
the results our strategic review in November last
year, we placed major emphasis on enhancing shareholder
value. The first steps in this strategy have now
been successfully delivered with the sale of EMD,
at a good price, to AlliedSignal. We can now address
the growth opportunities in our core businesses all
of which are performing well."
Credit Suisse First
Boston (Europe) Limited, which is regulated in the
United Kingdom by the Securities and Futures Authority
Limited, is acting for Johnson Matthey in relation
to the sale of the Electronic Materials Division
and for no one else, and will not be responsible
to anyone other than Johnson Matthey for providing
the protections afforded to customers of Credit Suisse
First Boston (Europe) Limited not for giving advice
in relation to the sale.
