Agreement to sell Catalyst Technologies business for £1.8bn with cash return of £1.4bn – delivering substantial value to JM shareholders

22 May 2025

Johnson Matthey Plc (“JM” or the “Group”) is pleased to announce that it has reached an agreement to sell its Catalyst Technologies business (“CT”) to Honeywell International, Inc. (“Honeywell”) at an enterprise value of £1,800m on a cash and debt-free basis (the “Transaction”). The Transaction is expected to deliver net sale proceeds of c.£1.6bn to the Group, subject to customary closing adjustments.

Following the sale of CT, JM will be repositioned as a highly streamlined group focused on Clean Air and PGMS, driving sustained strong cash generation to support attractive ongoing returns to shareholders. The sale of CT, together with the compelling investment proposition of JM, are expected to deliver substantial value to JM shareholders.

 

Key Highlights

  • Highly attractive CT sale valuation: enterprise value of £1,800m on a cash and debt-free basis, representing a transaction multiple of 13.3x EBITDA1

  • Significant cash return to shareholders: £1.4bn (equivalent to c.88% of expected net sale proceeds and c.£8 per JM share) expected to be returned to shareholders following completion of the Transaction, which is expected by the first half of calendar year 2026

  • JM to be repositioned as a highly streamlined group with a compelling investment proposition focused on delivering sustained strong cash generation and attractive ongoing cash returns to shareholders

    • Sustained scale and leadership: Group to be focused on its leading global Clean Air and PGMS businesses, operating in large and durable addressable markets with attractive long-term prospects

    • Deep and longstanding platinum group metals expertise: underpinning JM’s strong commercial advantages and leading positions

    • Operating profit growth: enhanced operating efficiencies as the Group transitions to a more focused and rationalised operating model, supporting the delivery of at least mid-single digit CAGR in pro forma2 Group underlying operating profit from FY2024/25 to FY2027/28

    • Sustained strong cash generation: a material increase in Group cash generation to at least £250m of Group free cash flow by FY2027/28, underpinned by growth in underlying operating profit, capex reducing to close to maintenance levels and material working capital benefits

    • Higher ongoing returns to shareholders under a refreshed capital allocation framework, in addition to the cash return pursuant to the Transaction: total annual cash returns to shareholders of at least £130m for FY2025/263, growing to at least £200m for FY2026/27 and beyond4

  • Delivering substantial near, mid and longer-term value for JM shareholders through the sale of CT and continued exposure to the attractive investment proposition of JM

 

Patrick Thomas, Chair of Johnson Matthey, said: "On behalf of the Board, we are pleased to announce the sale of CT which, together with the refreshed strategy of the Group, represents a strategically and financially compelling proposition for shareholders. Today's transaction realises significant value for shareholders, creating a Group with the core strengths, focus and discipline to deliver strong resturns for shareholders into the future."

Liam Condon, Chief Executive of Johnson Matthey, said: Today’s announcement represents a significant milestone in the history of Johnson Matthey. Following on from the divestment of our Medical Devices business at a highly attractive valuation, we have now agreed to the sale of our Catalyst Technologies business for £1.8bn. This allows JM to realise a very attractive valuation for this business that fully reflects its strong long-term growth prospects. We will now fundamentally re-shape Johnson Matthey into a more focused and leaner business. This will better position us to leverage our strong capabilities and leading market positions in Clean Air and PGM Services to drive a step change in sustainable cash generation with higher returns to shareholders. JM is a great company and we are confident that the actions we have announced today will deliver substantial and sustainable value to our shareholders.”

 

Strategic Rationale and Benefits of the Transaction

CT is a global leader in the licensing of process technology and supply of catalysts. Under the Group’s strategy, CT has delivered significant commercial wins and partnerships, and developed a pipeline of more than 150 projects in its sustainable technologies portfolio that is expected to deliver attractive long-term profitable growth as the world transitions to net zero.

Following a period of engagement with Honeywell, the Board of JM concluded that the terms of the Transaction represent a compelling value proposition for JM shareholders. In particular, the Board believes that:

  • The enterprise value of £1,800m fully reflects the long-term growth prospects of CT, including the delivery of CT’s sustainable technologies project pipeline

  • The financial terms of the Transaction are highly attractive in comparison to key valuation benchmarks. In particular:

    • The enterprise value of £1,800m represents a significant premium to the average CT sell-side analyst valuation of £945m5; and

    • The implied transaction multiple represents a significant premium to the current JM Group trading multiple of 5.7x FY2024/25 EV/EBITDA6

  • The all-cash nature of the consideration will enable a meaningful cash return to JM shareholders, expected to be £1.4bn (equivalent to c.£8 per JM share and c.88% of expected net sale proceeds)

Following the sale of CT, the Group will be focused on its leading positions in Clean Air and PGMS, in which JM has strong commercial advantages given its deep and longstanding platinum group metals expertise. The Group has also launched a number of actions to deliver further enhanced operating efficiencies, sustainably strong operating profit growth, cash generation and attractive returns to JM shareholders over the medium term. Further details on the Group’s strategic and financial investment proposition are set out in JM’s preliminary results announcement for FY2024/25.

On this basis, the Board of JM has unanimously approved the Transaction and believes the terms of the Transaction are in the best interests of JM and JM’s shareholders as a whole.

 

Use of Proceeds

Under the terms of the Transaction, CT is being sold for an enterprise value of £1.8bn on a cash and debt-free basis.

After deducting one-off payments and costs associated with the Transaction of c.£0.2bn (including tax, pension contribution and other transaction costs), this implies total net proceeds of c.£1.6bn to the Group (subject to customary closing adjustments). JM intends to return £1.4bn of these proceeds to JM shareholders following the completion of the Transaction via an appropriate return of value (“Return of Value”). JM expects to provide a further update on the Return of Value mechanism(s) and timing prior to completion of the Transaction.

The remaining c.£0.2bn of total net proceeds will be retained by the Group for general corporate purposes following completion of the Transaction. On a pro forma basis, this implies a reduction in the Group leverage multiple, which would be comfortably within the Group’s new target leverage range of 1.0x-1.5x net debt to EBITDA over the medium term.

 

Financial Details on Catalyst Technologies and Impact on the Group

As at 31st March 2025, the value of the gross assets of CT was £1,561m. For the fiscal year ended 31st March 2025, the CT underlying EBITDA was £119m and the CT underlying operating profit was £92m.

Based on financials as at 31st March 2025, the financial impacts of the Transaction on the Group are currently expected to be as follows:

  • The Group’s pro forma total underlying operating profit for the fiscal year ended 31st March 2025 would be £297m (representing a £92m adjustment);
  • The Group’s pro forma total assets as at 31st March 2025 would be £4,633m (representing a £1,561m adjustment); and
  • The Group’s pro forma total liabilities as at 31st March 2025 would be £2,912m (representing a £987m adjustment).

 

Next Steps

The Transaction is subject to customary conditions, including the receipt of certain customary regulatory approvals, and is expected to close by the first half of calendar year 2026.

 

UK Listing Rules

Due to the size of the Transaction in relation to the Group, it constitutes a Significant Transaction for the purposes of the UK Listing Rules made by the Financial Conduct Authority (the “FCA”) for the purposes of Part VI of the Financial Services and Markets Act 2000 (as amended), which came into effect on 29 July 2024 (the “UKLRs”) and is therefore notifiable in accordance with UKLR 7.3.1R and 7.3.2R. In accordance with the UKLRs, the Transaction is not subject to shareholder approval.

 

Enquiries:

Investor Relations
Martin Dunwoodie: Director of Investor Relations and Treasury, +44 20 7269 8241
Louise Curran: Head of Investor Relations, +44 20 7269 8235

Media:
Sinead Keller: Group External Relations Director, +44 20 7269 8218
Harry Cameron: Teneo, +44 7799 152148

 

In connection with the Transaction, Goldman Sachs International and Robey Warshaw are acting as Lead Financial Advisers to JM, and Citigroup and Deutsche Numis are acting as Financial Advisers and Joint Corporate Brokers to JM. Slaughter and May is acting as Legal Adviser to JM.

 

Notes:

1. Transaction multiple of 13.3x EBITDA is based on an agreed adjusted FY2024/25 EBITDA of £136m for the standalone CT business. The underlying EBITDA of the CT business in FY2024/25, as reported in JM Group, is £119m (comprising £92m of underlying operating profit, plus underlying depreciation and amortisation of £27m)

2. Excluding operating profit contribution from CT and Value Businesses

3. Equivalent to the total ordinary dividend for FY2024/25

4. JM’s current intention is for these total cash returns to be delivered through ordinary dividends for FY2025/26, and be broadly equally weighted between dividends and share buybacks for FY2026/27 and beyond

5. Average comprises 8 covering research analysts

6. Based on Group enterprise value of £3,278m (based on JM’s closing share price of £13.89 as at 21st May 2025) and Group underlying EBITDA of £572m