Industry Analysis
Smiths Group Agrees £2 Billion Sale of Detection Division to CVC
Smiths Group sells Smiths Detection to CVC Capital Partners for £2 billion as part of its shift to industrial engineering focus.
This article is based on an official press release from Smiths Group plc.
Smiths Group plc has officially announced the sale of its Smiths Detection division to funds advised by CVC Capital Partners. The transaction, which values the division at an enterprise value of £2.0 billion, represents the final major step in the company’s strategic restructuring plan initiated in early 2025. By divesting its security screening business, Smiths Group aims to transition into a focused industrial engineering entity.
According to the announcement made on December 3, 2025, the deal is expected to generate approximately £1.85 billion in net cash proceeds for the Group after transaction costs and customary adjustments. The completion of the sale is anticipated in the second half of 2026, pending regulatory approvals and necessary consultations with the Smiths Detection France SAS works council.
The agreed price of £2.0 billion represents a significant valuation for the threat detection unit. Based on financial results for the fiscal year ended July 31, 2025, the transaction implies a multiple of 16.3 times the division’s headline operating profit of £122 million, and 12.5 times its headline EBITDA of £160 million. For the same fiscal period, Smiths Detection reported revenue of £963 million and total assets of £1,650 million.
Smiths Group leadership has indicated that a “large portion” of the net proceeds will be returned to shareholders, with the remainder allocated to organic and inorganic growth initiatives for the company’s retained businesses. The Board stated that the valuation fully reflects the prospects of the Detection business, a sentiment echoed by market analysts who viewed the price as being at the upper end of expectations.
This divestment completes a broader transformation for Smiths Group. Following the separate sale of Smiths Interconnect to Molex for £1.3 billion, announced in October 2025, the Group is streamlining its portfolio to focus on two primary divisions:
In its official statement, the company described this move as a pivot toward becoming a “premium industrial engineering company.” The restructuring is designed to simplify the Group’s operations and improve capital allocation efficiency.
“The transaction… marks the final step in a major strategic restructuring initiated in January 2025 to transform Smiths Group.”
, Smiths Group Announcement
For CVC Capital Partners, the acquisition secures a global market leader in aviation security and threat detection technologies. Smiths Detection is widely recognized for its x-ray scanners, CT scanners, and trace detection systems used in airports, ports, and urban security environments globally. CVC has characterized the acquisition as a platform for long-term value creation. The firm highlighted Smiths Detection’s strong market position and its advanced digital capabilities, including automated detection algorithms, as key drivers for the investment. The asset is expected to complement CVC’s existing portfolio in the UK and the aerospace and defense sectors, which includes investments such as Ontic.
The sale of Smiths Detection appears to be a direct response to long-standing investor pressure to resolve the “conglomerate discount” that has historically weighed on Smiths Group’s share price. By separating its diverse business lines, the Group has unlocked a combined enterprise value of £3.3 billion through the disposals of Detection and Interconnect.
Market reaction suggests the strategy is working. Shares in Smiths Group rose approximately 2-3% following the announcement. Analysts at Panmure Liberum noted that the £2.0 billion price tag was at the “top end” of market expectations, which had ranged between £1.3 billion and £2.0 billion. This successful valuation, combined with the earlier sale of Interconnect, validates the Board’s decision to break up the conglomerate structure in favor of a streamlined industrial focus.
When will the transaction close? What will Smiths Group do with the money? Who are the advisors on the deal?
Smiths Group Agrees to £2.0 Billion Sale of Detection Division to CVC
Transaction Financials and Valuation
Strategic Pivot to Industrial Engineering
CVC Capital Partners’ Acquisition Strategy
AirPro News Analysis
Frequently Asked Questions
The sale is expected to complete in the second half of 2026, subject to regulatory clearances and consultations.
The company intends to return a large portion of the £1.85 billion net proceeds to shareholders, with the rest used to invest in the growth of its remaining divisions, John Crane and Flex-Tek.
Goldman Sachs and J.P. Morgan are acting as financial advisors to Smiths Group, with Freshfields providing legal counsel. Barclays and Latham & Watkins are advising CVC Capital Partners.
Sources
Photo Credit: Smiths Detection