Johnson Matthey expands pharma business, buying Meconic for L147 mill

Johnson Matthey, a UK firm best-known as a precious metals group and amaker of catalytic converters, has agreed to buy opiates supplier Meconic for L147.1 million ($206.9 million) in a deal designed to boost the former's pharmaceuticals business. Johnson Matthey is to pay L4.05 per Meconic share, which represents a premium of 42% on the Edinburgh, Scotland-based group's closing price on June 20.

Meconic is the UK's only legal supplier of heroin and cocaine for medicinal treatments, and is the parent company of Edinburgh-based Macfarlan Smith. The firm was formed in 1990 after a management buyout from Glaxo and produces codeine and morphine, as well as cocaine and heroin.

Meconic also produces Bitrex, a foul-tasting chemical which is principally used to deter children from ingesting hazardous materials such as bleach. Its other main activity involves the production of galantamine, made from daffodil bulbs and used in the treatment of Alzheimer's disease. As the acquisition announcement was being made, Meconic also posted a 21.4% rise in pretax profits to L9.8 million on turnover of L62.8 million (+2.4%) for the year ended April 30.