SMITH & Nephew is cutting its losses on Ioptex, a specialist American

lens business it bought five years ago which is making losses, writes

CHRISTOPHER SIMS.

It is going to Allegan Corporation for just #11m cash, which compares

with the #159m Smith paid for the company.

The #148m loss on the sale will show up in the group's next profit and

loss account but will make little impact on the balance sheet as

goodwill of #141m was written off against reserves at the time of

purchase.

Iotex makes lenses used for people having cataract surgery and it

proved a disastrous acquisition because price controls were introduced

in 1990 resulting in price erosion which prompted restructuring of the

industry.

The company had sales of just #27m last year and was barely

profitable. Its net assets were #18m.

The deal will be slightly earnings enhancing.

Smith has made a number of disposals lately to concentrate on core

activities.