De La Rue plc has announced that it has entered into a definitive agreement for the sale of its Authentication Division to Crane NXT, Co. for a cash consideration representing an enterprise value of £300 million (€360 million).
The agreement follows an extensive and wide-reaching process conducted by the Board of De La Rue, part of a strategic review initiated by Chairman Clive Whiley upon his appointment in 2023.
De La Rue faced headwinds over the last years, with the “exceptional cash costs” associated with dealing with legacy issues resulting in the group’s financial leverage becoming disproportionate to the size of the group’s operations
There also remained a substantial deficit on the group’s pension scheme.
“Both the group’s financial leverage and the pension scheme deficit have become detrimental to the financial performance of the group, creating conflicting stakeholder objectives,” said the company in providing the rationale for the transaction.
In announcing the deal, Mr Whiley stated: “The sale of our Authentication Division to Crane NXT represents a substantial step forward on our route to realise the underlying intrinsic value of the De La Rue business for the benefit of all stakeholders.
“We are delighted to reach agreement with a company with the stature of Crane NXT, with its complementary strengths and are confident that the Authentication Division will continue to build on its considerable successes over the past few years.”
He said that the sale will allow De La Rue to repay its revolving credit facility in full and provide “a springboard to unlock further intrinsic value” while finding a long-term funding solution for its pension scheme.
“In addition, we will be able to focus fully on building and growing our world-leading Currency business,” said Mr Wiley.
Aaron W. Saak, Crane NXT’s President and Chief Executive Officer, added: “The acquisition of De La Rue Authentication accelerates our strategy as a market leader in providing trusted technology solutions that secure, detect and authenticate our customers’ most valuable assets. Protection from counterfeiting and illicit trade is a priority for governments and leading commercial product brands. This acquisition expands our technology capabilities and will drive profitable growth in new markets.”
As part of the transaction, De La Rue’s existing facility in Malta will undergo a physical separation to allow both Currency and Authentication to operate independently.
The investment at the site announced in 2021 will continue completing the work to make Malta the largest banknote facility in the De La Rue portfolio.
De La Rue emphasises that “Malta remains a focus for investment.”
