De La Rue: Banknote printer agrees to £300m breakup

Bank of England banknote printer De La Rue has agreed to sell an arm of its business to an American firm for £300m.

The London-listed company announced this morning that it had entered into a definitive agreement for the sale of the group’s authentication arm to Crane NXT, a New York-listed industrial technology company.

When the sale is complete, De La Rue will be solely a currency printer, ditching its authentication business that works with government clients to help detect fraud.

The sale comes following a series of problems for the company, most recently being forced to defer significant pension payments into its retirement pot.

“Completion of the sale will allow us to repay our existing revolving credit facility in full ahead of its maturity on 1 July 2025 and 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,” said De La Rue chair Clive Whiley.

An additional £12.5m in deficit repair contributions will also be paid into the pension scheme over the next three years, the company added.

“That will help to boost its balance sheet and put it in a stronger financial position to strengthen its currency division which is expected to be sold in the near future,” said Russ Mould, investment director of AJ Bell.

“It’s already held talks with interested parties but has kept quiet on who they are and how much they are willing to pay.”

In July, De La Rue confirmed it was in discussions to sell off a portion of the company, which was announced alongside the printer’s full year results that had already been delayed in order for the firm to find a potential suitor.

It posted sliding earnings as forecast due to what it described as “substantial trading difficulties”, as revenue dropped 11.3 per cent from £350m to £310m. 

However, the group’s authentication arm’s revenue grew 12.5 per cent, surpassing the £100m target set by the company.

“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,” added Whiley.

“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.

“In addition, we will be able to focus fully on building and growing our world-leading currency business.”

De La Rue’s stock price is up 57 per cent over the last year, after reaching its lowest level ever in June 2023. The deal is expected to complete during the first half of 2025.