Johnson Matthey, the London-listed speciality chemicals firm, has agreed to acquire US catalyst maker Cormetech for up to 460 million US dollars (£343 million), aiming to capitalise on the rapidly growing global demand for data centres.
The deal values Cormetech at 360 million dollars (£269 million) upfront, with an additional earn-out of up to 100 million dollars (£75 million) contingent on the firm meeting specific financial performance targets. Johnson Matthey highlighted that Cormetech has been expanding in the US power generation market and holds a potential pipeline of work worth approximately one billion dollars (£750 million), primarily linked to data centres.
Strategic Expansion in Clean Air Solutions
The acquisition will bolster Johnson Matthey's clean air solutions division, enabling it to meet the rising demand for emissions control technologies in data centres. Data centres are being deployed rapidly worldwide, especially in the US, to power digital services and artificial intelligence (AI).
Johnson Matthey noted that Cormetech has secured around 300 million dollars (£224 million) in orders for the next two years, alongside a roughly one billion dollar pipeline of projects. This move follows the company's recent agreement to sell its Catalyst Technologies business for £1.3 billion, a reduction from the initial £1.8 billion due to performance adjustments, pending regulatory approval.
Financial Performance and Market Context
Johnson Matthey reported a 77% drop in pre-tax profit to £91 million for the year ending March, though underlying profit rose 11% to £271 million after stripping out one-off costs. The company acknowledged that while conflict in the Middle East has not yet affected its finances, global demand, supply chains, and inflation could pose future risks.
Campaigners in the UK and Ireland have raised concerns about data centres' high energy consumption and potential construction on green belt land. However, Johnson Matthey's CEO Liam Condon stated: "The sale of Catalyst Technologies is on track and the acquisition of Cormetech represents another important milestone in JM's development. Cormetech will materially enhance the scale of clean air solutions and create a global leader in stationary emissions control, including for the rapidly growing data centre market."
