- £300 million sale to Crane NXT
- Deal transforms De La Rue balance sheet
- Shares rally to two-year high
De La Rue’s (DLAR) shares rallied 15.5% to a two-year high of 108.5p after the Bank of England banknote printer announced a deal to sell its authentication division to US-based industrial technology company Crane NXT for £300 million.
Set to complete in the first half of 2025, the disposal will help to boost embattled De La Rue’s balance sheet and put it in a stronger financial position to strengthen its profitable currency division, a banknote design and printing business expected to be sold in the near future.
The company has already held talks with interested parties but has keep quiet on who they are and how much they are willing to pay for the currency business.
STRAIN RELIEF
De La Rue’s balance sheet has been under strain for years and the company remained in the red for the year to March 2024, with revenue weakening from the best part of £350 million to a shade over £310 million due to a currency industry downturn.
Proceeds from the authentication disposal will allow De La Rue to repay its existing revolving credit facility ‘in full’ and reduce leverage to a net cash position.
This will give the board the flexibility to ‘determine the best option to maximise the intrinsic value’ of the remaining currency division, which boasts an array of central bank clients around the world.
De La Rue insisted Crane NXT, which provides payments and authentication technologies, provides ‘an excellent fit’ for the authentication business, which works with government clients to help detect fraud.
WHAT DID THE CHAIRMAN SAY?
Clive Whiley, the experienced corporate troubleshooter who chairs De La Rue, said the authentication division sale 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.’
Whiley said the disposal will provide ‘a springboard to unlock further intrinsic value as we move to find a long-term funding solution for the group’s legacy defined benefit pension scheme. In addition, we will be able to focus fully on building and growing our world-leading currency business.’
