(Bloomberg) — De La Rue Plc shares surged the most in more than four years after the banknote printer agreed to sell its authentication arm to Crane NXT Co., precipitating a breakup of the more than 200-year-old British company.
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The cash transaction, which comes almost five months after De La Rue said it was in talks to sell assets, was agreed at an enterprise value of £300 million ($392 million), according to a statement on Tuesday. It’s expected to close in the first half of 2025.
Proceeds will allow the Basingstoke, England-based company, which prints banknotes featuring King Charles III, to repay its existing revolving credit facility in full ahead of its maturity on July 1, 2025, it said. They’ll also feed contributions to its pension scheme as it shifts to become a pure-play currency provider.
Crane NXT expects the acquisition to add to adjusted earnings per share in the first full year, the Waltham, Massachusetts-based company said in a separate statement.
The sale should help De la Rue clear its pension deficit three years ahead of schedule, bringing the company closer to finding a long-term funding solution, Chief Executive Clive Vacher said in an interview.
De La Rue also plans to inject more than £60 million into its debt-free currency business, which Vacher said has also drawn “multiple” expressions of interest that “remain live.”
“What we created is great optionality,” he said. While the most promising approach has come from industry players, “that is not to say we wouldn’t entertain private equity or other buyers,” Vacher said.
Regardless of the outcome of those talks, De La Rue is “very optimistic” about the standalone prospects for the currency business thanks to resilient demand for banknotes, Vacher said. “Cash will peacefully coexist with digital payments across the world.”
The company still expects “substantial” growth in adjusted operating profit for the year ending March 31, 2025, driven by the overall recovery in the currency market, he said. “Our order book is strong and will grow to the highest levels seen in a decade in the next few months,” Vacher added.
De La Rue shares traded up 15% as of 12:45 p.m. London time after surging as much as 27% earlier on Tuesday. That was the biggest intraday jump in more than four years.
The stock had languished in the past under a string of profit warnings and investor discontent. Last year, the company appointed City veteran Clive Whiley as chairman to add clout after pressure from shareholder activist Crystal Amber.
(Updates to add CEO comments on next steps for currency unit)
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