Smiths Group (LON:SMIN) said today it divested its Wallace in-vitro fertilization product line to Cooper Cos. (NYSE:COO) CooperSurgical subsidiary for $174 million (UK £140 million).
The divestiture is part of an ongoing program at Smiths to focus its portfolio on “market leading positions of scale in its chosen markets,” the company said. The company said that proceeds from the sale will be reinvested in “attractive growth opportunities.”
“This disposal demonstrates our ongoing commitment to focus our portfolio on building scalable technology differentiated leadership positions in our chosen markets. Wallace has a long and distinguished history in IVF and Smiths is proud to have played a role in developing the business over our 24 years of ownership. I am confident that Wallace will continue to develop as part of CooperSurgical’s broader offering in this area. Since commencing our disposal programme, we have disposed of £60 million of revenue and released over £170 million of capital for reinvestment in opportunities that offer the best levels of sustainable growth and value creation for the Company in our chosen markets,” Smiths Group chief exec Andy Smith said in a press release.
The Wallace division reported revenues of $24.9 million (UK £20 million) for its year ended July 31, 2016, with $14.9 million (UK £12 million) in operating profit.
In March, Smiths posted better-than-expected 1st-half profits as growth at its Smiths Medical division made up for poor performance at its John Crane mechanical seals unit.
Overall profits slid -8.5% for the 6 months ended Jan. 31 to $197.5 million (£140 million), or 46¢ per share (£0.325). Sales were down -3.1% to $19.84 billion (£1.37 billion) compared with the 1st half of fiscal 2014.
Although adjusted operating profits fell -6% to £217 million ($306.2 million), Smiths Group still topped analysts’ consensus expectation of £209.75 million.
