Smiths Group to sell medical unit to TA Associates for $2.3bn

Engineer Smiths Group has agreed to sell its medical division to US private equity firm TA Associates for $2.3bn.

Smiths, which is planning a "significant" return of capital to shareholders once the sale has completed, said the disposal was "superior to all other proposals received" during the separation process and is a better outcome for shareholders than a demerger.

The company expects to receive net cash proceeds on completion of $1.8bn (equivalent to £1.3bn). This will be used to return cash to shareholders and "to support investments in growth".

Smiths said the sale simplifies and positions the group for focused growth in its core industrial technology business.

As part of the deal, Smiths will receive a 30% equity interest in Trulli Topco - the new holding company of Smiths Medical - valued at $0.2bn.

Chief executive officer Paul Keel said: "This transaction positions Smiths as a more focused industrial technology company with compelling opportunities for growth, a common operating model and shared purpose.

"Smiths Medical is a leader across its markets, with strong brands and technology, although it has not delivered consistently strong financial performance relative to its medtech peers. We look forward to working with TA as a strategic partner in unlocking the potential for this business."