en.Wedoany.com Reported - Johnson Matthey Plc. announced it has reached an agreement to acquire CORMETECH Inc., a U.S. manufacturer of selective catalytic reduction (SCR) catalysts. CORMETECH primarily provides emission control products for stationary power generation and industrial applications, holding a leading position in the U.S. market with sustained high growth.
Under the terms of the transaction, Johnson Matthey will acquire CORMETECH for an enterprise value of $360 million, payable in cash, with the transaction closing at completion. This acquisition multiple represents 10.3 times CORMETECH's estimated 2026 EBITDA. Additionally, Johnson Matthey may pay up to an additional $100 million in cash consideration if CORMETECH achieves specific financial performance targets in 2028 and 2029.
The strategic significance of this acquisition lies in significantly enhancing the scale of Johnson Matthey's Clean Air solutions business. The combined product portfolio creates a highly complementary emission control product line in power generation applications, with strong global category leadership in a total addressable catalyst market exceeding $1 billion, expected to achieve double-digit growth in the medium term. CORMETECH's technology and intellectual property portfolio are leading and differentiated, enabling the combined group to provide customized catalysts and systems to a diverse customer base. The U.S. power generation market, supported by rapid data center construction, is experiencing structural demand growth, and CORMETECH holds a significant position in this market.
From a financial perspective, CORMETECH is expected to deliver strong sales and profit growth in the near, medium, and long term, providing an accretive effect for Johnson Matthey. This is supported by its substantial confirmed order book of approximately $300 million and a major project pipeline of around $1 billion. Post-merger, meaningful annualized operational synergies are expected at the EBITDA level, at least $20 million, planned to be fully realized by 2030. These synergies represent approximately 60% of CORMETECH's estimated 2026 EBITDA, with about 70% from revenue synergies and 30% from cost synergies. From the first full fiscal year of ownership, the acquisition is accretive to Johnson Matthey's earnings per share on a pre-synergy basis. Return on invested capital is expected to exceed Johnson Matthey's cost of capital within three years of closing. Following the completion of the CORMETECH acquisition, the sale of Johnson Matthey's Catalyst Technologies business, and the return of £1 billion in net sale proceeds to shareholders, Johnson Matthey's pro forma leverage ratio is approximately 1.8 times, with plans to deleverage through the group's strong cash generation, targeting a return to the 1.0 to 1.5 times leverage range by March 31, 2029.
The transaction is expected to close by the end of June or July 2026, subject to customary regulatory approvals. Johnson Matthey continues to meet its existing financial guidance on track regarding group cash generation and shareholder returns, including the return of £1 billion in net sale proceeds to shareholders following the sale of its Catalyst Technologies business to Honeywell International Inc., which is expected to close by the end of August 2026.
Liam Condon, Chief Executive Officer of Johnson Matthey, stated that the acquisition of CORMETECH is the next step in the company's strategy to focus on its strengths, with this business holding a leading position in emission control in the fast-growing U.S. power generation market and maintaining long-term, diversified customer relationships. This highly complementary acquisition significantly enhances the scale of the Clean Air solutions business while delivering attractive financial outcomes, supporting sustainable value creation for shareholders. Together with the expected sale of the Catalyst Technologies business, this transaction represents an important milestone in further strengthening Johnson Matthey's strategy, driving long-term value creation and cash generation.
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