The British industrial conglomerate Smiths Group has agreed to sell its Smiths Detection division, which specializes in baggage screening equipment and explosive detection systems, to private equity firm CVC Capital. The deal is valued at £2 billion (equivalent to $2.65 billion), including debt obligations.
This is reported by Finway
Deal Details and Financial Performance
Following the announcement of the sale, shares of Smiths Group, which is part of the FTSE-100 index, rose by more than 3% during morning trading. According to Panmure Liberum analyst Alex da Silva O’Hanlon, the offered price was at the upper end of the expected range of £1.3 to £2 billion.
Smiths Detection is the second-largest division of Smiths Group. For the financial year ending July 31, the division reported revenue of £963 million, with an operating profit of £122 million. After the completion of the transaction, the company expects to generate a net cash flow of around £1.85 billion, a significant portion of which it plans to return to shareholders.
“Shares of the FTSE-100 engineering group rose by more than 3% in morning trading. Analyst Alex da Silva O’Hanlon noted that the price was at the upper end of the £1.3 to £2 billion range expected by the market.”
Business Reorganization and Outlook
Smiths Group, once known for manufacturing precision clocks and speedometers, is undergoing a major business reorganization. Following pressure from American investment fund Engine Capital in January regarding the breakup of the conglomerate, the company is focusing on industrial technologies through its John Crane and Flex-Tek divisions. Along with the recent sale of Smiths Interconnect in October, this deal completes the restructuring process. As a result, the 170-year-old company will focus on flow management and thermal solutions for energy, industry, and construction.
Global airports are actively upgrading their security systems by implementing modern computed tomography for 3D baggage scanning. Such technologies allow passengers to carry up to 2 liters of liquids and not remove electronic devices from bags, speeding up the screening process.
The completion of the deal is expected in the second half of 2026, pending all necessary regulatory approvals and consultations with the works council of Smiths Detection France. Barclays acted as the financial advisor to CVC, while Goldman Sachs and J.P. Morgan served as advisors to Smiths Group.