Morgan Advanced Materials shares surge 4% after £75.8M sale of molten metal unit

Shares of Morgan Advanced Materials (LSE:MGAMM) jumped more than 4% on Friday following the company’s announcement that it has sold its Molten Metal Systems division to Vesuvius (LSE:VSVS) for £75.8 million.

The deal includes Morgan’s 75% holding in Morganite Crucible (India) Ltd. and is expected to finalize by early October 2025, pending shareholder approvals, the company said in a regulatory filing.

Under the agreement, Morgan will receive roughly £55.8 million in shares of Vesuvius-listed Foseco India Ltd. through a share swap, along with £20 million in cash for the remaining operations. The Indian shares will be subject to a six-month lock-up period under applicable regulations.

Molten Metal Systems, part of Morgan’s Thermal Products segment, produces crucibles used in processing non-ferrous metals such as zinc, aluminum, copper, brass, and bronze. The unit operates facilities in China, Germany, and India. In 2024, it generated £42.5 million in revenue, representing 4% of the group’s total, with an adjusted operating profit of £5.2 million.

Morgan stated that the transaction values the business at 13.2 times its 2024 adjusted operating profit, after accounting for approximately £7.3 million in capital gains tax.

The Thermal Products segment posted £418.2 million in revenue and £40 million in adjusted operating profit last year. The transaction structure combines a share exchange for the Indian operations with a cash purchase for the remainder of the business.

On an enterprise value basis, the deal includes the £75.8 million consideration plus the 25% minority stake in Morganite Crucible (India) Ltd. Approval from Foseco India shareholders, in which Morgan holds 75%, is required; no separate vote from Morgan or Vesuvius shareholders is needed.

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