UK-based engineering firm Smiths Group has agreed to sell Smiths Medical to Trulli Bidco, a wholly owned subsidiary of funds advised by TA Associates, in a $2.3bn deal.

The transaction also includes a $200m additional payment that will be contingent on the future performance of Smiths Medical.

Smiths Medical manufactures and supplies specialist medical equipment, as well as single-use medical devices and consumables, which are used in hospitals, ambulances and speciality care environments.

They are used during critical and intensive care, surgery and post-operative care and to support chronic illnesses.

The company’s product portfolio includes infusion systems that provide fluids and medication to manage pain and treat acute and chronic conditions.

It also includes vascular access products that protect healthcare workers and patients from needlestick injury and hospital-acquired infection.

Smiths Medical also offers vital care products that include devices to manage patients’ airways, and maintain their body temperature before, during and after surgery.

Smiths Group CEO Paul Keel said: “This transaction positions Smiths as a more focused industrial technology company with compelling opportunities for growth, a common operating model and shared purpose.

“Delivering on our commitment to separate, the sale captures immediate value for Smiths’ shareholders and positions us well for further value creation through our retained 30% ownership in Smiths Medical, as well as potentially $0.2bn additional consideration, contingent on future performance.”

The transaction is subject to Smiths shareholders’ approval and receipt of other customary regulatory approval.

The deal completion and receipt of the initial cash proceeds are expected by the end of this calendar year.

Upon completion of the proposed acquisition, Smiths expects to receive net cash proceeds of up to $1.8bn.

According to the deal, the company will also receive a 30% stake in Trulli Topco valued at $200m.

Smiths said that Topco will be the new holding company of its medical business.

Furthermore, it plans to use the proceeds to make investments in growth and facilitate a significant return of capital to shareholders.