Johnson Matthey announces that it has agreed to sell its Pigments & Dispersions business to a subsidiary of Rockwood Specialties Group, Inc., a leading specialty chemicals and advanced materials company, for £27.0 million in cash. The transaction is conditional upon regulatory approval in Germany.
Pigments & Dispersions is part of Johnson Matthey's Colours & Coatings Division. It manufactures and sells specialist inorganic pigments to the surface coatings and plastics industries, and has factories in Kidsgrove in Stoke-on-Trent, in Sudbury in Suffolk and in Melbourne, Australia. The business employs approximately 280 people. In the financial year ending 31st March 2004 Pigments & Dispersions had external sales of £29.9 million (total sales were £37.8 million including sales to other Johnson Matthey businesses) and made an operating profit of £2.5 million.
The net assets of the business at 31st March 2004 amounted to £33.6 million. After writing back £5.8 million of goodwill previously written off to reserves, the disposal will give rise to an exceptional loss of approximately £12 million before costs.
In November 2003 Johnson Matthey stated its intention to consider offers for parts of its Colours & Coatings Division in line with the group's long-term strategy of focusing on its core activities on Catalysts, Precious Metals and Pharmaceutical Materials. As part of this process, the group has also received offers for its Structural Ceramics business which is currently benefiting from an upturn and profits are well ahead of last year. The board considered that the offers received for Structural Ceramics did not provide adequate value particularly in view of the favourable outlook for that business. Consequently, the business will be retained for the time being.
Commenting on the transaction, Neil Carson, Chief Executive of Johnson Matthey said:
“The sale of Pigments & Dispersions represents a further step in our strategy of focusing the group on its core activities in Catalysts, Precious Metals and Pharmaceutical Materials. The remaining businesses in Colours & Coatings Division are performing well and we do not plan to make further disposals unless we receive offers that generate full value for our shareholders.”
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