Engine Capital Pressures Smiths Group for Breakup Review

Engine Capital, an activist hedge fund with a 2% stake in Smiths Group, is urging the engineering firm to undertake a strategic review that could lead to a breakup or sale of its divisions. The investor contends that Smiths has significant unrealized value due to its conglomerate structure, which has resulted in persistent undervaluation compared to its peers. In a letter to the board, Engine Capital suggested that the company could achieve a substantial premium by separating its businesses, particularly highlighting John Crane as a valuable asset. Smiths Group has recently raised its full-year organic revenue growth forecast to between 6% and 8%, reflecting strong performance in its divisions, which has positively influenced its stock price. Analysts have responded favorably to the growth guidance, maintaining 'Buy' ratings on the stock. The company has indicated its willingness to consider shareholder feedback while focusing on creating value.