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Investing.com -- Smiths Group PLC (LON:SMIN) stock rises 2.6% on Friday after announcing an agreement to sell its Smiths Interconnect business to Molex Electronic Technologies Holdings LLC for £1.3 billion ($1.7 billion).
The transaction values Smiths Interconnect at 15.1 times headline EBITDA of £86.1 million for fiscal year 2025. This sale represents significant progress in Smiths’ strategy, announced in January 2025, to become a more focused industrial engineering company and unlock portfolio value.
Smiths Group expects the deal to close in the second half of fiscal year 2026, subject to customary adjustments and regulatory approvals. The company remains committed to returning a large portion of the proceeds to shareholders while maintaining an investment grade credit rating.
"This is an important step as we deliver on our commitment to focus Smiths and unlock the inherent value in our business," said Roland Carter, Chief Executive of Smiths. "Today’s announcement, and our recent results, show we are delivering on our strategy with pace and purpose."
The company is also continuing with both sale and demerger processes for its Smiths Detection unit, as previously announced. Smiths is currently executing a £500 million share buyback program expected to complete by the end of 2025.
RBC analysts said the price came in higher than their expectations of £1 billion at 13x EV/EBITA, translating to roughly 80p per share, or about 3–4% above their group SOTP. They noted that completing the deal through a single clean sale, rather than a prolonged step-by-step process, was a positive outcome.
The focus, they added, now shifts to the Detection spin or sale, where they see a less straightforward path to value creation given regulatory and national security constraints.
The company will provide an update on the use of proceeds in its Q1 FY2026 Trading Statement scheduled for November 19, 2025.