REG - Johnson Matthey PLC - Agreement to sell Catalyst Technologies business

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RNS Number : 6939J  Johnson Matthey PLC  22 May 2025

22(nd) May 2025

 

Johnson Matthey Plc

(the Company)

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTUTUE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

FOR IMMEDIATE RELEASE

 

 

Agreement to sell Catalyst Technologies business for £1.8bn with cash return
of £1.4bn - delivering substantial value to JM shareholders

 

Johnson Matthey Plc ("JM" or the "Group") is pleased to announce that it has
reached an agreement to sell its Catalyst Technologies business ("CT") to
Honeywell International, Inc. ("Honeywell") at an enterprise value of £1,800m
on a cash and debt-free basis (the "Transaction"). The Transaction is expected
to deliver net sale proceeds of c.£1.6bn to the Group, subject to customary
closing adjustments.

 

Following the sale of CT, JM will be repositioned as a highly streamlined
group focused on Clean Air and PGMS, driving sustained strong cash generation
to support attractive ongoing returns to shareholders. The sale of CT,
together with the compelling investment proposition of JM, are expected to
deliver substantial value to JM shareholders.

 

Key Highlights

 

·    Highly attractive CT sale valuation: enterprise value of £1,800m on
a cash and debt-free basis, representing a transaction multiple of 13.3x
EBITDA(1)

 

·     Significant cash return to shareholders: £1.4bn (equivalent to
c.88% of expected net sale proceeds and c.£8 per JM share) expected to be
returned to shareholders following completion of the Transaction, which is
expected by the first half of calendar year 2026

 

·      JM to be repositioned as a highly streamlined group with a
compelling investment proposition focused on delivering sustained strong cash
generation and attractive ongoing cash returns to shareholders

 

o  Sustained scale and leadership: Group to be focused on its leading global
Clean Air and PGMS businesses, operating in large and durable addressable
markets with attractive long-term prospects

 

o  Deep and longstanding platinum group metals expertise: underpinning JM's
strong  commercial advantages and leading positions

 

o   Operating profit growth: enhanced operating efficiencies as the Group
transitions to a more focused and rationalised operating model, supporting the
delivery of at least mid-single digit CAGR in pro forma(2) Group underlying
operating profit from FY2024/25 to FY2027/28

 

o   Sustained strong cash generation: a material increase in Group cash
generation to at least £250m of Group free cash flow by FY2027/28,
underpinned by growth in underlying operating profit, capex reducing to close
to maintenance levels and material working capital benefits

 

o Higher ongoing returns to shareholders under a refreshed capital allocation
framework, in addition to the cash return pursuant to the Transaction: total
annual cash returns to shareholders of at least £130m for FY2025/26(3),
growing to at least £200m for FY2026/27 and beyond(4)

 

·      Delivering substantial near, mid and longer-term value for JM
shareholders through the sale of CT and continued exposure to the attractive
investment proposition of JM

 

Patrick Thomas, Chair of Johnson Matthey, said: "On behalf of the Board, we
are pleased to announce the sale of CT which, together with the refreshed
strategy of the Group, represents a strategically and financially compelling
proposition for shareholders. Today's transaction realises significant value
for shareholders, creating a Group with the core strengths, focus and
discipline to deliver strong returns for shareholders into the future."

 

Liam Condon, Chief Executive of Johnson Matthey, said: "Today's announcement
represents a significant milestone in the history of Johnson Matthey.
Following on from the divestment of our Medical Devices business at a highly
attractive valuation, we have now agreed to the sale of our Catalyst
Technologies business for £1.8bn. This allows JM to realise a very attractive
valuation for this business that fully reflects its strong long-term growth
prospects. We will now fundamentally re-shape Johnson Matthey into a more
focused and leaner business. This will better position us to leverage our
strong capabilities and leading market positions in Clean Air and PGM Services
to drive a step change in sustainable cash generation with higher returns to
shareholders. JM is a great company and we are confident that the actions we
have announced today will deliver substantial and sustainable value to our
shareholders."

 

Strategic Rationale and Benefits of the Transaction

 

CT is a global leader in the licensing of process technology and supply of
catalysts. Under the Group's strategy, CT has delivered significant commercial
wins and partnerships, and developed a pipeline of more than 150 projects in
its sustainable technologies portfolio that is expected to deliver attractive
long-term profitable growth as the world transitions to net zero.

 

Following a period of engagement with Honeywell, the Board of JM concluded
that the terms of the Transaction represent a compelling value proposition for
JM shareholders. In particular, the Board believes that:

 

·   The enterprise value of £1,800m fully reflects the long-term growth
prospects of CT, including the delivery of CT's sustainable technologies
project pipeline

 

·     The financial terms of the Transaction are highly attractive in
comparison to key valuation benchmarks. In particular:

 

o  The enterprise value of £1,800m represents a significant premium to the
average CT sell-side analyst valuation of £945m(5); and

 

o  The implied transaction multiple represents a significant premium to the
current JM Group trading multiple of 5.7x FY2024/25 EV/EBITDA(6)

 

·   The all-cash nature of the consideration will enable a meaningful cash
return to JM shareholders, expected to be £1.4bn (equivalent to c.£8 per JM
share and c.88% of expected net sale proceeds)

 

Following the sale of CT, the Group will be focused on its leading positions
in Clean Air and PGMS, in which JM has strong commercial advantages given its
deep and longstanding platinum group metals expertise. The Group has also
launched a number of actions to deliver further enhanced operating
efficiencies, sustainably strong operating profit growth, cash generation and
attractive returns to JM shareholders over the medium term. Further details on
the Group's strategic and financial investment proposition are set out in JM's
preliminary results announcement for FY2024/25.

 

On this basis, the Board of JM has unanimously approved the Transaction and
believes the terms of the Transaction are in the best interests of JM and JM's
shareholders as a whole.

 

Use of Proceeds

 

Under the terms of the Transaction, CT is being sold for an enterprise value
of £1.8bn on a cash and debt-free basis.

 

After deducting one-off payments and costs associated with the Transaction of
c.£0.2bn (including tax, pension contribution and other transaction costs),
this implies total net proceeds of c.£1.6bn to the Group (subject to
customary closing adjustments). JM intends to return £1.4bn of these proceeds
to JM shareholders following the completion of the Transaction via an
appropriate return of value ("Return of Value"). JM expects to provide a
further update on the Return of Value mechanism(s) and timing prior to
completion of the Transaction.

 

The remaining c.£0.2bn of total net proceeds will be retained by the Group
for general corporate purposes following completion of the Transaction. On a
pro forma basis, this implies a reduction in the Group leverage multiple,
which would be comfortably within the Group's new target leverage range of
1.0x-1.5x net debt to EBITDA over the medium term.

 

Financial Details on Catalyst Technologies and Impact on the Group

 

As at 31(st) March 2025, the value of the gross assets of CT was £1,561m. For
the fiscal year ended 31(st) March 2025, the CT underlying EBITDA was £119m
and the CT underlying operating profit was £92m.

 

Based on financials as at 31(st) March 2025, the financial impacts of the
Transaction on the Group are currently expected to be as follows:

 

·      The Group's pro forma total underlying operating profit for the
fiscal year ended 31(st) March 2025 would be £297m (representing a £92m
adjustment);

·      The Group's pro forma total assets as at 31(st) March 2025 would
be £4,633m (representing a £1,561m adjustment); and

·      The Group's pro forma total liabilities as at 31(st) March 2025
would be £2,912m (representing a £987m adjustment).

 

Next Steps

 

The Transaction is subject to customary conditions, including the receipt of
certain customary regulatory approvals, and is expected to close by the first
half of calendar year 2026.

 

UK Listing Rules

 

Due to the size of the Transaction in relation to the Group, it constitutes a
Significant Transaction for the purposes of the UK Listing Rules made by the
Financial Conduct Authority (the "FCA") for the purposes of Part VI of the
Financial Services and Markets Act 2000 (as amended), which came into effect
on 29(th) July 2024 (the "UKLRs") and is therefore notifiable in accordance
with UKLR 7.3.1R and 7.3.2R. In accordance with the UKLRs, the Transaction is
not subject to shareholder approval.

 

 

Enquiries

 

Investor Relations

Martin Dunwoodie     Director of Investor Relations & Treasury
+44 20 7269 8241

Louise Curran           Head of Investor Relations
           +44 20 7269 8235

 

Media

Sinead Keller            Group External Relations Director
          +44 7833 285585

Harry Cameron         Teneo
                        +44 7799 152148

 

 

Johnson Matthey Plc is listed on the London Stock Exchange (JMAT)

Registered in England & Wales number: 00033774

Legal Entity Identifier number: 2138001AVBSD1HSC6Z10

 

 

In connection with the Transaction, Goldman Sachs International and Robey
Warshaw are acting as Lead Financial Advisers to JM, and Citigroup and
Deutsche Numis are acting as Financial Advisers and Joint Corporate Brokers to
JM. Slaughter and May is acting as Legal Adviser to JM.

 

Notes:

1.    Transaction multiple of 13.3x EBITDA is based on an agreed adjusted
FY2024/25 EBITDA of £136m for the standalone CT business. The underlying
EBITDA of the CT business in FY2024/25, as reported in JM Group, is £119m
(comprising £92m of underlying operating profit, plus underlying depreciation
and amortisation of £27m)

2.     Excluding operating profit contribution from CT and Value Businesses

3.     Equivalent to the total ordinary dividend for FY2024/25

4.     JM's current intention is for these total cash returns to be
delivered through ordinary dividends for FY2025/26, and be broadly equally
weighted between dividends and share buybacks for FY2026/27 and beyond

5.     Average comprises 8 covering research analysts

6.     Based on Group enterprise value of £3,278m (based on JM's closing
share price of £13.89 as at 21(st) May 2025) and Group underlying EBITDA of
£572m

 

 

 

About Johnson Matthey

 

Johnson Matthey is a global leader in sustainable technologies. For over 200
years, the Group has used advanced metals chemistry to tackle the world's
biggest challenges. Many of the world's leading energy, chemicals and
automotive companies depend on JM's technology and expertise to decarbonise,
reduce harmful emissions and improve their sustainability. Today, about 10,500
JM professionals collaborate with its network of customers to provide
solutions to the global challenges of climate change, energy supply and
resource scarcity.

 

About Catalyst Technologies

 

CT is a global leader in licensing process technology and supply of catalysts.
The business uses advanced technology and expertise in catalysis chemistry to
provide solutions for customers to decarbonise and increase the yield and
efficiency of their chemical processes. CT has strong market positions in
syngas and addresses a large range of end markets including traditional fuels,
fertilisers, food ingredients, wood products and paint as well as addressing
large new markets for sustainable fuels and chemicals, and low carbon hydrogen
which are expected to grow over time. The business has a pipeline of more than
150 sustainable technologies projects, a global manufacturing, licensing and
engineering footprint and around 1,900 dedicated employees.

 

Important Notices

 

Goldman Sachs International ("Goldman Sachs"), which is authorised by the PRA
and regulated by the FCA and the PRA in the United Kingdom, is acting
exclusively for JM and for no one else in connection with the matters set out
in this Announcement and will not be responsible to anyone other than JM for
providing the protections afforded to clients of Goldman Sachs or for
providing advice in relation to the subject matter of this Announcement or any
other matters referred to in this Announcement. Neither Goldman Sachs nor any
of its affiliates, directors or employees owes or accepts any duty, liability
or responsibility whatsoever (whether direct or indirect, consequential,
whether in contract, in tort, under statute or otherwise) to any person who is
not a client of Goldman Sachs in connection with this Announcement, any
statement contained herein or otherwise.

 

Robey Warshaw LLP, which is authorised and regulated in the United Kingdom by
the FCA, is acting exclusively for JM and no one else in connection with the
matters referred to in this Announcement and will not regard any other person
as its client in relation to the matters referred to in this Announcement and
will not be responsible to anyone other than JM for providing the protections
afforded to clients of Robey Warshaw LLP, nor for providing advice in relation
to the matters referred to in this Announcement.

 

Citigroup Global Markets Limited ("Citi"), which is authorised by the PRA and
regulated by the FCA and the PRA in the United Kingdom, is acting exclusively
for JM and for no one else in connection with the matters set out in this
Announcement and will not be responsible to anyone other than JM for providing
the protections afforded to clients of Citi or for providing advice in
relation to the subject matter of this Announcement or any other matters
referred to in this Announcement. Neither Citi nor any of its affiliates,
directors or employees owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, consequential, whether in contract, in
tort, under statute or otherwise) to any person who is not a client of Citi in
connection with this Announcement, any statement contained herein or
otherwise.

 

Numis Securities Limited (trading as Deutsche Numis) ("Deutsche Numis"), which
is authorised and regulated by the FCA in the United Kingdom, is acting
exclusively for JM and for no one else in connection with the matters set out
in this Announcement and will not be responsible to anyone other than JM for
providing the protections afforded to clients of Deutsche Numis or for
providing advice in relation to the subject matter of this Announcement or any
other matters referred to in this Announcement. Neither Deutsche Numis nor any
of its affiliates, directors or employees owes or accepts any duty, liability
or responsibility whatsoever (whether direct or indirect, consequential,
whether in contract, in tort, under statute or otherwise) to any person who is
not a client of Deutsche Numis in connection with this Announcement, any
statement contained herein or otherwise

 

 

 

Appendix 1 - Summary of the Principal Terms of the Transaction

 

Share Purchase Agreement

 

Parties and structure:

 

The Transaction is governed by the share purchase agreement ("Share Purchase
Agreement") entered into between Johnson Matthey Plc ("JM") and Honeywell
International, Inc. ("Honeywell"). Pursuant to the Share Purchase Agreement
and subject to the Conditions (as defined below), JM has agreed to sell and
Honeywell has agreed to purchase the entire issued share capital of each of
Johnson Matthey Davy Technologies Limited, Johnson Matthey Chemicals GmbH and
Johnson Matthey Process Technologies, Inc., which, together with their
subsidiaries, will, as at Completion, hold the CT business.

 

Conditions:

 

The Transaction is subject to obtaining approvals from certain antitrust and
other regulatory authorities (including in the UK, US and China) and the
completion (in all material respects) of the reorganisation of the CT business
within the Transaction perimeter.

 

The long stop date for satisfaction of the conditions (the "Long Stop Date")
is 21 February 2026. In the event that any of the antitrust approvals are not
satisfied by the Long Stop Date, the Long Stop Date may be extended where
certain conditions are met.

 

Consideration:

 

The consideration for the Transaction is calculated on the basis of an
enterprise value of £1.8 billion, adjusted to reflect customary normalisation
of working capital, the settlement of inter-company balances and net debt as
at the date of Completion.

 

Warranties and indemnities:

 

JM has given customary fundamental warranties relating to its title to the
shares in the target companies, as well as to its own capacity and solvency.
JM has also given customary limited fundamental warranties relating to the
nature of the CT business.

 

Warranty and indemnity insurance is in place in respect of the majority of
warranties given by JM under the Share Purchase Agreement and JM's liability
in relation to those warranties is capped at £1.

 

JM has given indemnities in respect of certain matters relating to the CT
business and the reorganisation of the CT business prior to Completion,
including in respect of certain environmental, tax, pensions and litigation
matters. Such indemnities are subject to limitations with regards quantum and
time period.

 

Termination:

 

The Share Purchase Agreement may be terminated by either party if any of the
conditions to the transaction described above are not satisfied or (if capable
of waiver) waived on or before the Long Stop Date (subject to postponements of
the Long Stop Date, and the party electing to terminate having complied in all
material respects with its obligations under the Share Purchase Agreement
relating to the satisfaction of the conditions).

 

Governing law and jurisdiction:

 

The Share Purchase Agreement is governed by English law. The English courts
will have exclusive jurisdiction to settle any dispute arising out of or in
connection with the agreement.

 

 

 

Appendix 2 - Historical Financial information relating to JM's CT business

The following historical financial information relating to CT has been
extracted without material adjustment from the consolidation schedules and
supporting accounting records that underlie the audited consolidated financial
statements of the Group for the year ended 31(st) March 2024 and the unaudited
consolidated financial statements of the Group for the year ended 31(st) March
2025.

 

PwC LLP is the auditor of the Group in respect of each of the years ended
31(st) March 2024 and 31(st) March 2025. The consolidated statutory accounts
for the Group for the year ended 31(st) March 2024 have been delivered to the
Registrar of Companies. The auditor's report for this period was unqualified
and did not contain statements under section 498(2) or (3) of the Companies
Act.

 

The following financial information does not constitute statutory accounts
within the meaning of section 434 of the Companies Act. The financial
information in this Section has been prepared using the IFRS accounting
policies used to prepare the consolidated financial statements of the Group
for the year ended 31(st) March 2024. The financial information for the year
ended 31(st) March 2025 has been prepared using IFRS accounting policies
consistent with those used for the year ended 31(st) March 2024.

 

Unaudited income statements relating to JM's Catalyst Technologies business

 

 

                              Year ended 31 March 2024  Year ended 31 March 2025

£ million
£ million
 Revenue                      653                       728
 Cost of sales                (474)                     (508)
 Gross profit                 179                       220
 Distribution costs           (52)                      (57)
 Administrative expenses      (52)                      (71)
 Non-underlying costs         (5)                       (6)
 Operating profit             70                        86
 Underlying operating profit  75                        92

 

 

 

Unaudited statement of net assets relating to JM's Catalyst Technologies
business

 

                                                Year ended 31 March 2025

£ million
 Assets
 Non-current assets
 Property, plant and equipment                  271
 Right-of-use assets                            21
 Goodwill                                       263
 Other intangible assets                        44
 Investments in subsidiaries                    10
 Other receivables                              41
 Deferred tax assets                            7
 Total non-current assets                       657

 Current assets
 Inventories                                    207
 Taxation recoverable                           7
 Trade and other receivables                    654
 Cash and cash equivalents                      33
 Derivative financial instruments               3
 Total current assets                           904
 Total assets                                   1,561

 Liabilities
 Current liabilities
 Trade and other payables                       (846)
 Lease liabilities                              (3)
 Taxation liabilities                           (26)
 Cash and cash equivalents ─ bank overdrafts    (1)
 Provisions                                     (3)
 Total current liabilities                      (879)

 Non-current liabilities
 Lease liabilities                              (18)
 Deferred tax liabilities                       (8)
 Employee benefit obligations                   (6)
 Provisions                                     (7)
 Trade and other payables                       (69)
 Total non-current liabilities                  (108)
 Total liabilities                              (987)
 Net assets                                     574

 Equity
 Share capital                                  67
 Share premium                                  32
 Other reserves                                 (65)
 Retained earnings                              540
 Total equity                                   574

 

 

 

Appendix 3 - Additional Information (in relation to JM and CT)

Risks

 

The risks disclosed below are those which JM considers: (i) are material risks
related to the Transaction; (ii) will be new material risks to the Group as a
result of the Transaction; or (iii) are existing material risks for the Group
which will be impacted by the Transaction. Shareholders should carefully
consider the risks and uncertainties described below, together with all other
information contained in this announcement. The risks described below are not
set out in any order of priority, assumed or otherwise.

 

Risks relating to the Transaction

 

(i) The Transaction may not proceed to Completion

 

Completion of the Share Purchase Agreement is subject to, among other things,
the consent of relevant antitrust and other regulatory authorities. There can
be no assurance that the conditions precedent to the Share Purchase Agreement
will be satisfied (or waived, if applicable) and, accordingly, that Completion
of the Transaction will take place.

 

If Completion of the Transaction does not occur, JM will not receive the cash
proceeds from it. Further, some other costs incurred by the JM Group in
connection with the Transaction (such as legal and other advisory fees) would
be incurred without the receipt of those cash proceeds.

 

If the Transaction does not proceed to Completion, there can be no guarantee
that JM will be able to secure another transaction involving the CT business
on terms more favourable than, or equivalent to, the Transaction.

 

In addition, non-completion of the Transaction could erode confidence among
investors and stakeholders. This could, in turn, have a material adverse
effect on JM's business prospects, financial results and overall financial
condition. Failure to complete the Transaction may also have a negative impact
on the Group's ability to deliver on its future strategy. This may be the case
even if the failure to complete the Transaction is outside of JM's control.

 

If the Transaction does not proceed to Completion, this may lead to management
and employee distraction due to perceived uncertainty in the future of the CT
business. This may, in turn, affect the profitability of the JM Group.
Uncertainty around JM's commitment to the CT business might lead suppliers and
customers of the CT business to feel it is not in their commercial interests
to continue to do business with the CT business. The failure to implement the
Transaction may therefore have an adverse effect on the performance of the CT
business and its value to JM, which may adversely affect JM's share price.

 

(ii) Exposure to liabilities and restrictions under the SPA

 

The Share Purchase Agreement contains obligations in the form of warranties,
indemnities, certain pre-Completion undertakings and a number of customary
post-Completion restrictive covenants in favour of Honeywell. JM has taken
steps to minimise the risk of liability through customary limitations on
liability and sought to ensure that the restrictive covenants will not impact
JM's business as currently carried on. However, the limitations on liability
will not apply in all scenarios and any liability to make a payment arising
from a successful claim by Honeywell under the Share Purchase Agreement could
reduce the consideration and have an adverse effect on its business, results
of operations, prospects and financial condition. Similarly, restrictive
covenants applicable to JM could also have an adverse effect on its ability to
pursue future opportunities and therefore its business, results of operations,
prospects and financial condition.

 

JM has undertaken a customary disclosure process to minimise the risk of
liability under these provisions and Honeywell has put in place a policy of
warranty and indemnity insurance ("W&I Insurance") in respect of such
liabilities typical for a transaction of this nature. However, such W&I
Insurance may be insufficient or may not operate so as to preclude the
possibility of claims being made against JM.

 

(iii) Pre-Completion changes affecting the CT business and the Continuing
Group

 

During the period from the signing of the Share Purchase Agreement to
Completion of the Transaction, events or developments may occur, including
changes in trading, operations or outlook of the Continuing Group or the CT
business, or external market factors, which could make the terms of the Share
Purchase Agreement less attractive for JM. JM and Honeywell would be obliged
to complete the Transaction notwithstanding such events or developments. This
may have an adverse effect on the Continuing Group's business, results of
operations, financial condition and prospects.

 

New material risks relating to the Continuing Group

 

If the Transaction is completed, the following risks and uncertainties may
occur or result as a consequence:

 

(i) JM will be dependent on the business of the Continuing Group which will be
less diversified and profits will be lower

 

Following Completion of the Transaction, the Continuing Group's business will
be smaller and less diversified. Without the benefit of the revenues or
profits of the CT business, the Continuing Group's profits will be lower and
its overall financial performance will depend more on the performance of each
of its continuing operations and the success of its business strategy.

 

In particular, and noting that Clean Air generates the majority of revenues,
any underperformance by any business or division within the Continuing Group
will have a larger relative impact on the Continuing Group than would have
been the case before the Transaction. Furthermore, the business of the
Continuing Group may be more susceptible to adverse economic changes than
would have been the case prior to the Transaction.

 

(ii) The Transaction may have a disruptive effect on the Continuing Group

 

The Transaction has required, and will continue to require, substantial
amounts of investment, time and focus from the management teams and employees
of JM which could otherwise be spent operating the JM Group in the ordinary
course. Key managers and employees may become distracted by the Transaction
and, accordingly, decision-making at JM may be delayed, deferred or otherwise
impacted. This disruption could be prolonged if Completion of the Transaction
is materially delayed. Further, if key managers and employees of the
Continuing Group decide to leave, the Continuing Group may incur additional
costs in recruiting and attempting to recruit appropriate replacements, and
there can be no assurance that the Continuing Group will be able to identify
suitably talented or qualified replacements. The loss of any such key persons
may have a material disruptive effect on the provision of services to the
Continuing Group and as a result, may have a material adverse effect on the
Continuing Group's business, results of operations, financial condition and
prospects.

 

(iii) The quantum, timing and form of the Return of Value will be determined
by the Board in due course

 

Whilst JM has announced (in this announcement) its intention to carry out the
Return of Value (being a return of £1.4bn) following Completion of the
Transaction, the quantum, timing and form of any such return of value shall be
at the discretion of the Board and is subject to the Board continuing to
believe that such declaration is in the best interests of shareholders at the
time. The tax treatment of the Return of Value for shareholders and any risks
arising therefrom will be impacted by the determination as to the form of the
Return of Value in due course.

 

Existing material risks relating to the Group that will be impacted by the
Transaction

 

Shareholders should be aware that the value of an investment in JM may go down
as well as up and can be volatile. The price at which shares in JM may be
quoted and the price which investors may realise for their shares will be
influenced by a large number of factors, some specific to JM and its
operations and some which may affect producers of chemicals and industrial
catalysts or publicly traded companies as a whole, or other comparable
companies. The sentiments of the stock market regarding the Transaction and
the position of JM following its Completion will be one such factor and this,
together with other factors including actual or anticipated fluctuations in
financial performance of JM and its competitors, market fluctuations, and
legislative or regulatory changes for the sector, could lead to the market
price of the shares in JM going up or down.

 

Material contracts

 

Johnson Matthey:

 

The following is a summary of each contract (not being a contract entered into
in the ordinary course of business) to which the Group is or has been a party:
(i) within the two years immediately preceding the date of this announcement
which is, or may be, material; or (ii) at any time, which contains provisions
under which any member of the Group has any obligation or entitlement which is
material to the Group as at the date of this announcement:

 

Material contracts which relate to the Transaction:

 

·     Share Purchase Agreement: A summary of the Share Purchase
Agreement is set out in Appendix 1 of this announcement.

 

·   Long-term Agreements and Transitional Services Agreement: Pursuant to
the Transaction, certain agreements will be entered into at Completion
covering, amongst other things, the supply of services by JM to CT. Further
details in relation to these arrangements will be announced in due course and
no later than Completion.

 

Material contracts which do not relate to the Transaction:

 

·      Sale of Medical Device Components business: In March 2024, the
Group announced that it had entered into a share purchase agreement to effect
the sale of 100% of its Medical Device Components business to Montagu Private
Equity for cash consideration of US $700 million (£550 million) on a cash
free debt free basis. The sale completed on 1 July 2024.

 

·     US Private Placement issuance: In October 2024, the group refinanced
around £300 million of term debt with a US Private Placement issuance. The
following unsecured notes, which were issued by the Company pursuant to a note
purchase agreement entered into on 15 October 2024 (the "Note Purchase
Agreement"), are outstanding:

 

i.    $95,000,000 5.02% Series A Senior Notes due December 19, 2031
("Series A Notes");

ii.    €125,000,000 4.03% Series B Senior Notes due December 19, 2031
("Series B Notes");

iii.   $34,000,000 5.18% Series C Senior Notes due December 19, 2034
("Series C Notes");

iv.   €94,000,000 4.19% Series D Senior Notes due December 19, 2034
("Series D Notes"); and

v.    €20,000,000 4.32% Series E Senior Notes due December 19, 2036
("Series E Notes"),

 

(together, the "Notes").

 

The Note Purchase Agreement permits JM to substitute JM Inc. or JM Holdings,
Inc., (each a wholly owned subsidiary) as the issuer of any Notes, provided
that any Notes issued by such entities are guaranteed by JM. At the date of
this announcement, no Notes have been issued by entities other than JM and
therefore no such guarantees have been granted.

 

The Note Purchase Agreement is governed by the laws of the State of New York.

 

CT:

 

No contracts (other than contracts entered into in the ordinary course of
business) have been entered into by CT: (i) within the period of two years
immediately preceding the date of this announcement, which are or may be
material to CT; or (ii) at any time, which contain any provisions under which
CT has any obligation or entitlement which is, or may be, material to CT as at
the date of this announcement.

 

Details of any legal and arbitration proceedings

 

Johnson Matthey:

There are no governmental, legal or arbitration proceedings (including any
such proceedings which are pending or threatened of which JM is aware), during
the period covering the 12 months prior to the date of this announcement which
may have, or have had in the recent past, a significant effect on JM and/or
JM's financial position or profitability.

 

CT:

There are no legal or arbitration proceedings (including any such proceedings
which are pending or threatened of which JM is aware) during a period covering
the 12 months prior to the date of this announcement which may have, or have
had in the recent past, a significant effect on CT and/or CT's financial
position or profitability.

 

Significant change in financial position

 

Johnson Matthey:

There has been no significant change in the financial position or financial
performance of the Group since 31(st) March 2024, being the end of the last
financial period for which financial information has been published.

CT:

There has been no significant change in the financial position or financial
performance of CT since 31(st) March 2024, being the end of the last financial
period for which financial information has been published.

Related Party Transactions

 

Other than those matters disclosed previously in the published Annual Report
and Accounts of JM and/or otherwise disclosed in this announcement (including
this Appendix) or JM's Preliminary Results for the year ended 31(st) March
2025, there were no related party transactions entered into by JM during the
period since 31(st) March 2023.

 

 

 

Appendix 4 - Definitions

The following definitions apply throughout this announcement and the
Appendices, unless expressly stated otherwise:

 

"Board" or "Board of Directors" means the board of directors of JM.

 

"Completion" means completion of the Transaction in accordance with the terms
of the Share Purchase Agreement.

 

"Continuing Group" means the JM Group following Completion.

 

 "CT" or "Catalyst Technologies" means the Catalyst Technologies business.

 

"FCA" means the Financial Conduct Authority.

 

"Johnson Matthey", "JM", "Group" or "JM Group" means Johnson Matthey plc.

 

"PGMS" means the Platinum Group Metals Services business.

 

"PGMs" means platinum group metals.

 

"Honeywell" means Honeywell.

 

"Registrar of Companies" means the governmental body controlling the
incorporation and administration of companies under the Companies Act 2006,
also known as "Companies House".

 

"Return of Value" means the return of £1.4bn of the Transaction proceeds to
JM shareholders following Completion.

 

"Share Purchase Agreement" means the share purchase agreement entered into by
JM and Honeywell in relation to the sale of the CT Business, dated on or
around the date of this announcement, as more particularly described in
Appendix 1.

 

"Transaction" means the proposed sale by JM of the CT business to Honeywell in
the manner described in this announcement and to be effected pursuant to the
Share Purchase Agreement.

 

"Transitional Services Agreement" means the transitional services agreement to
be entered into between JM and Honeywell at Completion, as more particularly
described in Appendix 3.

 

"UKLRs" means the UK Listing Rules made by the FCA for the purposes of Part VI
of the Financial Services and Markets Act 2000 (as amended), which came into
effect on 29 July 2024.

 

"W&I Insurance" means warranty and indemnity insurance.

 

 

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