Smiths in UK sells medical division to ICU for $ 2.4 billion, snub TA
- Smiths Group accepts sale of unit to ICU Medical
- Withdraw the recommendation for the TA Associates contract
- Equities up 4%, biggest increase in FTSE 100 index
September 8 (Reuters) – British industrial technology group Smiths (SMIN.L) has agreed to sell its medical division to US company ICU Medical (ICUI.O) for $ 2.4 billion, it said Wednesday, canceling an earlier $ 2 billion deal with private equity firm TA Associates.
Shares of London-listed Smiths rose 4% at the start of trading as another bidding war for a UK company could brew, with Smiths Medical becoming the latest UK target to pull bids from a buyer for private equity and a strategic buyer.
Smiths struck a deal with Boston-based TA Associates in early August to sell the division, which manufactures catheters and other medical devices, but on Wednesday withdrew its support for TA’s bid in favor of the “superior” offering from ICU Medical.
The deal with the private equity firm in August caused Smiths’ shares to fall as the value fell below market expectations.
TA did not immediately respond to a request for comment.
California medical device maker ICU Medical said the addition of syringes, ambulatory infusion sets and other products from Smiths Medical would help build a leading company in infusion therapy.
“The combination of these two activities makes sense for the medical device market and fits well with the existing activities of ICU Medical,” said Vivek Jain, Managing Director of ICU Medical.
The deal with ICU is expected to close in the first half of next year, Smiths said, subject to shareholder and regulatory approval.
Smiths expects initial net proceeds of $ 1.85 billion from the sale to ICU, about $ 50 million more than under the TA deal, he said. The London-based company continues to offer a return to shareholders of 55% of the proceeds through a share buyback.
In another case of battle for the takeover of a British medical company, strategic buyer Philip Morris (PM.N) outbid private equity firm Carlyle (CG.O) last month as part of the takeover from the manufacturer of asthma medication Vectura (VEC.L). Read more
Report by Yadarisa Shabong in Bengaluru; Editing by Shounak Dasgupta and Jan Harvey
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