De La Rue sells international identity solutions business for £42m
De La Rue, the world's premier currency and authentication provider, said it has agreed the sale of its International Identity Solutions business to HID Corporation for a cash consideration of £42m.
Under the terms of the agreement, HID Global will acquire De La Rue's international identity solutions contracts, associated software, passport assembly facilities in Malta, and certain printing contracts of security documents such as visas and birth/death/marriage certificates.
The transaction is expected to complete within this calendar year.
London-listed De La Rue said the agreement also includes it providing printing services to HID Global until March 2022.
UK passport contract not included
The UK passport contract is outside the scope of the agreement, the firm said.
This transaction will allow the group to refocus on identity-related security features and components where the market opportunities are more accessible, Del La Rue said.
Strong synergies in technology and customer relations between identity security features and the rest of the group will enable it to generate better returns on investment.
The sale proceeds will strengthen the group's balance sheet, providing it with greater flexibility to invest in other strategic growth areas.
In the financial year to 30 March 2019, the business generated sales of £37.8m and an operating profit of £2.3m the company said.
The gross assets of the business were £88m as at 30 March 2019, of which £38m will be transferred with the business.
"After assessing all options, we believe that exiting the end to end identity solutions market is the right one for the Group and will deliver the most value to shareholders”, said Martin Sutherland, Chief Executive Officer of De La Rue.
“Focusing on the identity-related security features and components is in line with our strategy to transform De La Rue to an asset light and more technology-led business.
“This transaction strengthens our balance sheet and allows us to focus on the other strategic growth areas of Security Features, Polymer, and PA&T."