Johnson Matthey (LSE:JMAT) has completed the sale of its Catalyst Technologies division to Honeywell, marking a significant restructuring for the company. The proceeds from the sale were partially returned to shareholders through a special dividend, while the remainder will be used to reduce debt and fund future investments. This strategic move aims to streamline the company's operations, focusing on its core businesses in catalytic converters and platinum group metals refining.
The sale leaves Johnson Matthey with a more concentrated portfolio, including its Clean Air division, which produces emissions-control catalysts for vehicles, and PGM Services, which handles the refining and trading of platinum group metals. The company also has a small Hydrogen Technologies unit that supplies components for green hydrogen. Management believes that this simplified structure will improve returns and operational efficiency.
To reduce its reliance on the automotive market, Johnson Matthey has acquired Cormetech, a producer of catalysts used in gas turbines that power data centers. This acquisition targets the growing niche of emissions control in data centers, driven by the increasing demand for electricity supply due to artificial intelligence. Brokers speculate that this stationary emissions work could become a significant part of the company's earnings by the end of the decade.
Skeptics, however, point to potential challenges, such as the long-term impact of electric vehicle adoption on catalytic converter demand and operational issues at the company's refineries. Despite these concerns, supporters argue that Johnson Matthey's shares trade at a discount to its continental peers and that the company's more focused strategy could attract takeover interest.