UK's Johnson Matthey to sell medical device business for $700 million

(Reuters) - Britain's Johnson Matthey (JM) will sell its medical device components business to Montagu Private Equity for $700 million in cash, as part of its strategy to focus on growth units and streamline operations.

Shares of the FTSE 250-listed firm climbed as much as 9.7% to a 10-month high of 1,873 pence, as it also announced share buybacks worth 250 million pounds ($318.2 million) on Wednesday from proceeds of the sale, once it is complete by the third quarter of 2024.

JPMorgan analysts said it was a "better-than-expected" sale value for a non-core business.

The unit, which makes components for medical device manufacturers globally with a focus on precious metal alloys, recorded annual revenue of 93 million pounds for the year ended March 31, 2023.

The sale, along with a part of JM's battery materials business announced in 2022, which it deemed "Value Businesses", marks the conclusion of a divestment programme the company undertook to focus on its core operations, which includes making catalytic converters and pollution filters for cars among other things.

The centuries-old British firm has raised prices of products and cut costs by axing hundreds of jobs and shutting down manufacturing sites to protect profit and offset the impact of lower precious metal prices and currency swings.

($1 = 0.7858 pounds)

(Reporting by Eva Mathews in Bengaluru; Editing by Janane Venkatraman and David Evans)