CVC Capital Partners Acquires Smiths Detection from Smiths Group for £2 Billion
CVC Capital Partners has agreed to acquire Smiths Detection, the security screening division of Smiths Group, in a deal valued at approximately £2 billion ($2.5 billion). The transaction represents one…
Executive Summary
Real-time Market IntelligenceCVC Capital Partners has agreed to acquire Smiths Detection, the security screening division of Smiths Group, in a deal valued at approximately £2 billion ($2.5 billion).
Key Takeaways
3 points- 1 CVC Capital Partners has agreed to acquire Smiths Detection, the security screening division of Smiths Group, in a deal valued at approximately £2 billion ($2.5 billion).
- 2 The acquisition values Smiths Detection at 16.3 times its headline operating profit of £122 million for the fiscal year ending July 2025.
- 3 The deal is expected to close in the first half of 2026, subject to regulatory approvals including clearance from competition authorities in the United States, European Union, and United Kingdom.
CVC Capital Partners has agreed to acquire Smiths Detection, the security screening division of Smiths Group, in a deal valued at approximately £2 billion ($2.5 billion). The transaction represents one of the largest carve-out deals in the European security sector this year.
Transaction Overview
The acquisition values Smiths Detection at 16.3 times its headline operating profit of £122 million for the fiscal year ending July 2025. Smiths Group expects to receive net proceeds of approximately £1.85 billion after transaction costs and taxes, which it plans to return to shareholders through a combination of special dividends and share buybacks.
The deal is expected to close in the first half of 2026, subject to regulatory approvals including clearance from competition authorities in the United States, European Union, and United Kingdom.
Strategic Rationale
For CVC, the acquisition provides exposure to the growing airport security and threat detection market, which has seen increased investment following the post-COVID recovery in global air travel. Smiths Detection is a leading provider of security screening technology for airports, ports, and critical infrastructure worldwide.
Company Profile: Smiths Detection
Smiths Detection employs approximately 5,000 people globally and operates manufacturing facilities in Germany, the United States, and Malaysia. The division generated revenues of approximately £500 million in its last fiscal year, with an EBITDA margin of around 30%.
Market Context
The global aviation security market is projected to grow at approximately 7% annually through 2030. Recent comparable transactions in the security technology sector have seen valuations ranging from 12x to 18x EBITDA.
Seller Perspective
For Smiths Group, the divestiture represents a strategic pivot toward its core industrial technology businesses. The company shares rose 4.9% on announcement of the deal, extending year-to-date gains to approximately 40%.