Johnson Matthey bets on data centre emissions control market with Cormetech buy
Johnson Matthey's Strategic Acquisition of Cormetech
By Neeshita Beura and Yadarisa Shabong
May 28 (Reuters) - British chemicals firm Johnson Matthey (JM) on Thursday agreed to buy Cormetech for $360 million, in a bid to tap demand for emission control tied to mushrooming U.S. data centres, even as it forecast slower profit growth for fiscal 2027.
Cormetech's Competitive Edge in Emission Control
"Nobody has a competitive offering like Cormetech for primary emission control in data centres," JM CEO Liam Condon told analysts. North Carolina-based Cormetech makes technologies used to cut greenhouse gas emissions from natural gas turbines and coal-fired power plants.
Data Centre Emissions: The Growing Challenge
Data centres need to control their nitrogen oxide pollution, which is Cormetech's strength, and eliminate carbon monoxide and volatile organic compounds, which is JM's mainstay, Condon said.
Strategic Focus and Business Realignment
The Cormetech deal marks Condon's first major acquisition after years of offloading assets to focus on emissions control and platinum group metals refining.
Clean Air Unit and Market Challenges
Johnson Matthey's largest unit, Clean Air, mainly makes pollution filters for internal combustion engine cars, but faces challenges as the automakers move to electric models.
Financial Outlook and Deal Impact
Expected Closing and Earnings Contribution
The deal, expected to close in June or July, would add to Johnson Matthey's earnings from fiscal 2027.
Profit Forecast and Contributing Factors
Excluding Cormetech and the planned £1.33 billion divestment of Catalyst Technologies to Honeywell, JM expects group underlying operating profit to rise in the low- to mid-single-digit percentage for the year ending March 2027. The forecast marks a slowdown from the 14% growth it reported for fiscal 2026, partly due to loss provisions related to its U.S. refinery and higher maintenance costs linked to its UK refinery.
Geopolitical Risks and Market Performance
JM warned that heightened geopolitical uncertainty from the Middle East conflict could hurt future performance through global demand, supply chains, and inflation, although it saw no material impact in the last fiscal year.
The company's shares were down marginally by 1004 GMT.
Reporting Credits
(Reporting by Nithyashree R B, Neeshita Beura and Yadarisa Shabong in Bengaluru; Editing by Subhranshu Sahu and Diti Pujara)
