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HOME arrow Archive arrow Engineering Archive arrow Johnson Matthey paying £154m for German firm
Johnson Matthey paying £154m for German firm
Written by Lautaro Vargas   
Wednesday, 12 December 2007
Image
Neil Carson, chief executive of Johnson Matthey
Royston-based Johnson Matthey’s expansion of its catalysts business is set to take another major leap forward with the proposed cash acquisition of Argillon Group for €214 million (£154m).
Headquartered in Germany where it has its main manufacturing site, Argillon is owned by US private equity firm, KKR (Kohlberg Kravis Roberts & CO.) through its Ceramics Luxembourg subsidiary.

The group specialises in catalysts and advanced ceramic materials and manufactures and sells a range of products into a wide number of industries.

It employs around 1,500 people worldwide and has further manufacturing sites in Poland and Romania as well as a sales and engineering site in Georgia, USA, and sales offices in Kuala Lumpur, Malaysia and Shanghai, China.

Matthey said in 2006 that it would use the proceeds from the £153m sale of its Ceramics division to help fund its strategy of focusing the group on its core activities in catalysis, precious metals and fine chemicals.

Argillon has leading catalyst technology which is used to control the emissions of oxides of nitrogen (NOx). Its products include catalysts for mobile and stationary applications including heavy and medium duty diesel vehicles; stationary diesel engines; marine applications; and coal, oil and gas fired turbines in power stations.

Commenting on this transaction, Neil Carson, chief executive of Johnson Matthey, said: “The acquisition of Argillon will complement our existing technology for controlling harmful NOx emissions.

“In the next few years we expect that global concerns about air quality and climate change will mean this technology will be widely used in both mobile and stationary applications around the world.”

Argillon also manufactures and markets a variety of engineered ceramics such as insulators used in power transmission and distribution applications, innovative piezo ceramics used as actuators for the textile machinery and automotive industries as well as alumina components for semi conductors and circuit breakers.

The company’s ceramic materials work differs to that divested by Johnson Matthey in 2006 and is used in emission control technology.

Argillon’s technologies will add to Johnson Matthey’s existing emission control capabilities to meet the increasingly challenging regulations to control harmful NOx emissions.

Matthey believes that with the increased concern on the effects of poor air quality on human health and the environment, legislation to control NOx emissions will continue to tighten around the world.

In the year to September 30, 2007 Argillon reported sales of €160m (£150m), adjusted EBIT (earnings before interest and taxes) of €19m (£14m) and adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) of €26m (£19m).

The transaction, which is conditional upon regulatory clearance in Germany, will be financed from existing borrowing facilities.

KKR, which has owned Argillon since 2002, is one of the world’s leading capital investment companies with investments of around $100 billion (£50bn) since its incorporation in 1976. In Europe, KKR has had a stake in companies such as Legrand SA, Willis, Wassass-Zumtobel, Tenovis or Wincor Nixdorf.

 
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