CHEMICALS specialist Johnson Matthey has spun off its Medical Device Components business to a private equity firm for over half a billion pounds.

According to a notice from the firm, London-based Montagu Private Equity will take on the division, which makes components for medical device manufacturers, for $700m (£550m) cash.

The Medical Device Components business currently operates across manufacturing sites in the US, Mexico and Australia.

Johnson Matthew said it intends to return up to half of the cash back to investors through a share buyback programme and use the other half to pay off existing debts and other general corporate purposes.

The FTSE 250 firm added that this sale concludes its planned divestment plan to shore up the business's future and takes the proceeds from strategic sales well over the firm's initial target of £300m.

Liam Condon, chief executive of Johnson Matthey, said the sale represents a "significant milestone" in the company's corporate journey.

Shares enjoyed a strong day of trading and closed up 7.76 per cent.

(c) 2024 City A.M., source Newspaper