Following discussions with various parties about a sale of its Battery Materials business, Johnson Matthey (JM) has announced that it has not been able to reach an agreement to sell the business as a going concern. It is therefore beginning consultation with employees about proposed closure of the business and pursuing the sale of its individual assets.
CropEnergies, a specialist in biomass-based sustainable chemicals, has taken a licence to use Johnson Matthey’s (JM) DAVY ethyl acetate process technology in a new 50,000 tonnes/year plant at Zeitz, Germany, that will make renewable ethyl acetate from renewable ethanol feedstock using renewable energy. Ethyl acetate is widely used in cosmetics, flexible packaging and coatings, paints and adhesives, food, beverage and pharmaceutical applications.
Johnson Matthey (JM) has agreed to sell the majority of its Health business to Altaris Capital Partners, an investment firm focused exclusively on the healthcare industry, for £325 million enterprise value, or 9.8 x EBITDA in the 12 months to 30 September 2021. Completion is anticipated in mid-2022, subject to regulatory approvals.
Following a detailed review, Johnson Matthey has concluded that the potential returns from its Battery Materials business “will not be adequate to justify further investment”. It will therefore seek to sell all or parts of the business.
Although demand has been growing strongly, the company said, “so is competition from alternative technologies and other manufacturers” and the market is becoming commoditised. JM had explored partnerships in the field but found that “our capital intensity is too high compared with other more established large-scale, low-cost producers”.
Johnson Matthey, Thomas Swan and the UK’s Centre for Process Innovation (CPI) have teamed up in the ICE-Batt project. This seeks how to optimise battery technology by using innovative forms of carbon to overcome some of the limitations of lithium-ion batteries, including energy density, power density and low temperature performance.
In a pre-close trading update for the financial year ended 31 March 2021, Johnson Matthey (JM) CEO Robert MacLeod revealed that: “We have commenced a strategic review of Health, as we continue to focus resources to maximise value for our shareholders”.
Full results will be announced on 27 May but it is known that Health, which offers API custom manufacturing services, controlled substances, catalysts and generics, generated sales of £223 million, about 5% of the total sale. The division’s full-year operating performance is expected to be above the prior year.