De La Rue's Strategic Shift: Selling Authentication Division to Crane NXT

De La Rue plc, the UK-based security printing specialist, has announced a significant strategic move by agreeing to sell its Authentication Division to Crane NXT, Co. for an enterprise value of £300 million in cash. This transaction, expected to close in the first half of 2025, subject to customary closing conditions, will have a profound impact on De La Rue's long-term strategic goals and financial stability.

Unlocking Intrinsic Value and Reducing Debt

The sale of the Authentication Division allows De La Rue to unlock the intrinsic value of this profitable segment, providing much-needed capital to the Group. The proceeds from the sale will be used to repay the Group's existing revolving credit facility in full, reducing leverage to a net cash position. This improvement in financial stability will provide De La Rue with greater flexibility to navigate market uncertainties and make strategic decisions.

Addressing the Pension Deficit

In addition to reducing debt, the sale enables De La Rue to significantly reduce the deficit on its legacy defined benefit pension scheme. The company will pay £30 million as an accelerated contribution on Completion and an additional £12.5 million in deficit repair contributions over the period to April 2027. This addresses a critical issue for De La Rue, enhancing its overall financial health and stability.

Focus on the Core Currency Business

Following the sale, De La Rue will become a pure-play currency provider, with the Currency Division remaining as the core business. This strategic shift allows the company to focus its resources and efforts on growing and optimizing this profitable division, which is a market leader in its field. By concentrating on its core currency business, De La Rue can better position itself for future growth and success.

Potential Growth Opportunities for the Currency Division

With the financial constraints of the Authentication Division and pension scheme deficit reduced, the Currency Division has the potential to grow and thrive. The sale of the Authentication Division to Crane NXT, a strong buyer with complementary strengths, ensures that the Authentication Division's people and customers will be well taken care of. This transaction allows De La Rue to unlock the intrinsic value of the Authentication Division, creating a more resilient and flexible Group overall.

In conclusion, the sale of the Authentication Division to Crane NXT is a strategic move that aligns with De La Rue's long-term goals. By unlocking intrinsic value, reducing debt, addressing the pension deficit, and focusing on its core currency business, De La Rue positions itself for future growth and success. The potential growth opportunities for the Currency Division, combined with the improved financial stability, make this an exciting time for De La Rue and its stakeholders.