Engineering giant Smiths Group in talks over medical sale

 

Engineering giant Smiths Group is in talks over a reported £2 billion sale of its medical division that was involved in the first successful IVF treatment.

The conglomerate confirmed it was in early stage discussions after receiving a preliminary approach for Smiths Medical amid reports it could raise £2 billion.

US healthcare group CareFusion is thought to be the suitor.

Smiths Medical designed the world's first commercially available embryo transfer catheter, which played a key role in the conception of Louise Brown - the first IVF baby, who was born in Oldham.

The division is now one of the largest in the group, contributing 35% of overall earnings and employing 7,750 staff across 30 countries.

Smiths rejected a £2.45 billion offer for the medical division from private equity firm Apax in January 2011 for being too low.

The subsidiary, which delivers specialist devices for the healthcare industry, saw underlying operating profits fall 10% in the six months to January as it suffered amid austerity cuts in Europe as well as the impact of a new medical device tax in the US and EU regulation costs.

A trading update last week revealed that earnings in the division were continuing to come under pressure from these factors and investment in emerging markets, but Smiths said revenues growth had held up.

The firm's last set of annual results showed a 7% rise in group-wide underlying profits to £497 million, boosted by the performance of its oil and gas division John Crane.

It employs 23,000 people across five divisions, around 2,000 of whom are in the UK.

PA

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