UK-based engineering conglomerate Smiths Group has decided to spin off its medical devices unit Smiths Medical following a review of its business options.
Smiths Medical primarily focuses on medical devices and services across infusion therapy, vascular access, vital care, and speciality care areas.
The company’s devices are used in hospital, emergency, home and speciality care settings during critical and intensive care, surgery, post-operative care and to support chronic illness management.
Smiths Group’s decision to spin off the medical unit comes after various failed attempts to divest the business, including the collapse of a recent £7bn merger with ICU Medical.
The division also faced various challenges such as delays in product launches and loss of certifications under new regulations. Its revenue also took a hit with a 2% decrease in the previous financial year.
Smiths noted that the separation will allow Smiths Medical to deliver its full potential driven by new product launches, while exploiting various opportunities in the market.
After the spinoff, Smiths Group intends to focus on the growth strategy for its Industrial technology business.
Smiths Group CEO Andy Reynolds Smith said: “This planned separation will strengthen both Smiths and Smiths Medical as they each focus on accelerating the execution of their plans and maximising the opportunities in their respective markets.
“Smiths Medical is well positioned to capitalise on its leadership positions and the investments made in the business. Smiths will concentrate on executing on its growth strategy as a global leader in Industrial Technology, driving maximum value for our shareholders.”
The exact details of the proposed spinoff are set to be announced with the group’s interim results in March next year.