Smiths Group (LSE:SMIN) has agreed to sell its Interconnect division to Molex, part of the Koch Industries empire, for £1.3 billion: a price that has gone down well in the City.
RBC said the deal, expected to close in the second half of 2026, represents a multiple of around 16.5 times forecast 2026 earnings before interest, tax and amortisation, and sits comfortably above its own £1 billion valuation.
The sale was described as “a positive outcome” that adds about 3–4% to the broker’s sum-of-the-parts valuation.
Smiths put Interconnect up for sale earlier this year as part of a plan to simplify the group and focus on higher-margin businesses such as John Crane and Flex-Tek.
The division accounted for about 13–14% of operating profit and has already been classified as discontinued.
RBC expects an update on how the proceeds will be used at next month’s trading statement, noting that management has previously signalled a large capital return alongside investment in growth.
The next question, analysts said, is what happens to the Detection arm, which makes airport and security scanners. RBC cautioned that regulatory hurdles could make any sale or spin-off less straightforward than Interconnect’s disposal.
Jefferies took a similar view, calling the deal “a good price” and “a significant milestone” in Smiths’ reshaping.
The bank, which rates the shares a Hold with a 1,930p target, expects a positive market reaction but warned that the more complex Detection division may not be as easy to sell.
Smiths shares closed at 2,438p (up 3%), valuing the group at just over £8 billion. With one disposal wrapped up and another under review, the group’s next move could prove decisive in determining whether investors stay patient with the wider restructuring story.