Productivity-enhancing instrumentation and controls manufacturer Spectris (SXS) saw its share price rally 3.5% to £25.83 after agreeing the sale of its BTG business to Voith for €319m in cash.
BTG designs and makes specialised measuring instruments and software used by paper industry players to improve operational performance and streamline costs. This is not seen as an attractive market for Spectris which is concentrating on markets where potential growth opportunities are much more exciting.
This includes areas like life sciences, pharmaceuticals, energy, transport and the wider technology space.
STREAMLINING AND FOCUS
Other parts of the Spectris business may also be up for grabs as the near-£3bn FTSE 250 company streamlines its own operations.
‘The sale of BTG represents our first step in executing our strategy for a more focused business and delivers compelling value for shareholders,’ said chief executive Andrew Heath.
The deal still needs to be rubber-stamped by various regulators, although that is not seen as a likely problem, which should see the sale completed sometime during the last quarter of this year.
FUNDS TO INVEST
The cash will be put to good use. Spectris had wanted to bolster its balance sheet to some extent with around £300m of net debt on the books at the end of 2018. But more importantly, the sale of BTG will free up extra funds to invest in growth opportunities going forward, possibly including bolt-on acquisitions.
Analysts forecast Spectris to report a decline in pre-tax profit from £241.4m in 2018 to £225.4m this year, on £1.66bn of revenue, partly due to BTG’s lost income but also because of tight budgets in some of its markets.
