CVC to acquire baggage unit for $2.65bn

February 2026 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

February 2026 Issue

Smiths Group has agreed to sell its Smiths Detection division, known for baggage screening in airports and explosive detection systems, to CVC Capital Partners in a transaction valuing the business at £2bn. Funds advised by CVC will acquire the company at a multiple of 16.3 times headline operating profit of £122m and 12.5 times headline EBITDA of £160m for the financial year to 31 July 2025. Based on customary adjustments, Smiths expects net cash proceeds of approximately £1.85bn. The group intends to return a large portion of proceeds to shareholders, with the remainder allocated to organic and inorganic growth initiatives designed to strengthen its core engineering capabilities.

CVC will invest through CVC Capital Partners IX. Completion is subject to regulatory approvals and consultation processes in France and is expected in the second half of 2026. Barclays acted as financial adviser and Latham & Watkins served as legal counsel to CVC.

“Smiths Detection’s industry-leading threat detection and security screening technologies play a crucial role in helping protect people and critical infrastructure worldwide,” said Dominic Murphy, a managing partner and co-head of the UK private equity team at CVC, and Conor Keogh, managing director at CVC. “We look forward to supporting the business during the next phase of its growth and development through continued investment in technology innovation, high-quality engineering and best-in-class aftermarket service.”

“We are excited to partner with Jérôme de Chassey and his team,” said James Mahoney, partner and head of CVC’s private equity activities in the aviation, defence and space sectors. “Smiths Detection’s strong market positions, anchored by its global leadership in aviation, create a compelling platform for long-term value creation.”

“Today we have reached another significant milestone for Smiths, with the agreement to sell Smiths Detection to CVC for an enterprise value of £2.0bn,” said Roland Carter, chief executive of Smiths. “This builds on our recently announced sale of Smiths Interconnect and demonstrates strong execution against the strategic actions we set out in January centred on value creation. We are focusing Smiths as a premium industrial engineering company specialising in flow management and thermal solutions, and today’s announcement positions us strongly to deliver enhanced growth and returns.”

Smiths Detection employs about 3400 people and operates across Europe, the US and Asia. The business is a global leader in aviation security and supplies screening systems to 47 of the world’s top 50 airports. It also serves other critical infrastructure including government and commercial buildings, public venues, as well as ports and borders for cargo and vehicle inspection. The company maintains a niche capability in chemical threat identification for defence markets, supported by advanced research and development teams that continue to innovate in response to evolving global security challenges.

For Smiths Group, the sale advances a strategy set out in January 2025 to unlock value, enhance shareholder returns and refocus as a high-performance industrial engineering company. The agreed sale of Smiths Interconnect to Molex Electronic Technologies Holdings, LLC was announced on 16 October 2025 and a binding share purchase agreement was signed on 11 December 2025, with completion targeted for the second half of fiscal year 2026. In November 2025 Smiths also launched a £1bn share buyback programme, scheduled to be substantially completed by the end of calendar year 2026.

CVC said the firm will draw on experience in corporate carve-outs and scaling newly independent companies to support Smiths Detection’s next phase of growth. The sale remains subject to customary closing conditions.

Richard Summerfield