JM to acquire Cormetech, materially enhancing scale in clean air solutions
Johnson Matthey Plc. has reached an agreement to acquire CORMETECH Inc., a leading and high-growth U.S. manufacturer of selective catalytic reduction (SCR) catalysts providing emissions control for stationary power generation and industrial applications.
Under the terms of the transaction, JM will acquire Cormetech for an enterprise value of $360 MM payable in cash on completion, which represents a 10.3x acquisition multiple based on Cormetech's expected 2026 EBITDA. An additional earn-out consideration of up to a total of $100 MM may be payable in cash during calendar years 2028 and 2029, conditional on Cormetech achieving certain financial performance targets.
Key highlights
- Acquisition of the leading SCR catalyst manufacturer with a significant market presence in a structurally growing U.S. power generation market, with demand underpinned by the rapid construction of data centers
- Compelling strategic rationale: materially enhances the scale of JM's Clean Air Solutions business, with the enlarged portfolio comprising:
- Highly complementary emissions control products in power generation applications
- Strong global category leadership in a total addressable catalyst market of over $1 B that is expected to deliver double digit growth over the medium term
- Leading and differentiated portfolio of technology and IP, enabling the combined group to provide customized best-in-class catalysts and systems across a range of future energy platforms to a highly diverse customer base
- Highly attractive financial outcomes: supports sustainable value creation for JM shareholders
- Cormetech is expected to deliver strong growth in sales and profit over the near, medium and long term that will be accretive to JM, underpinned by a large, secured c.$300 MM orderbook and substantial c.$1 B project pipeline
- Meaningful annualized run-rate synergies of at least $20 MM at the EBITDA level, to be fully realized by 2030. This is equivalent to c.60% of Cormetech's expected 2026 EBITDA and comprises approximately 70% revenue and 30% cost synergies
- EPS accretive to JM from the first full year of ownership on a pre synergy basis
- Return on invested capital to exceed JM's cost of capital within three years following completion
- JM to operate at approximately 1.8 times pro forma leverage following the acquisition of Cormetech, sale of JM's Catalyst Technologies business and return of £1 B net sale proceeds to JM shareholders, with strong Group cash generation supporting de-leveraging to within JM's 1.0 to 1.5 times target leverage range by 31st March 2029
- Transaction expected to complete at the end of June or in July 2026 following receipt of customary regulatory approvals
- JM remains on track to deliver existing financial guidance on Group cash generation and shareholder returns, including returning £1 B of net sale proceeds to shareholders following the sale of JM's Catalyst Technologies business to Honeywell International Inc. (completion expected by the end of August 2026)
Liam Condon, Chief Executive Officer, Johnson Matthey, said: “The acquisition of Cormetech is the next step in delivering our strategy of focusing on Johnson Matthey's strengths. This is a business we have long admired, given its leading position and longstanding and diverse customer relationships in emissions control for the rapidly growing U.S. power generation market. Through this highly complementary acquisition, we will be able to materially enhance the scale of our Clean Air Solutions business whilst delivering attractive financial outcomes to support sustainable value creation for our shareholders.
“Together with the expected sale of our Catalyst Technologies business, this transaction represents another important milestone in our strategy to further strengthen JM, driving long-term value creation and cash generation.”
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