De La Rue Sells Authentication Division for £300M Cash

In a significant transaction, De La Rue plc announced the sale of its Authentication Division to Crane NXT, Co. for £300 million, a move anticipated to streamline operations and enhance financial stability ahead of completion in 2025.

Date: 15-10-2024

AI Rating: 7

The report details a strategic sale by De La Rue plc of its Authentication Division for an enterprise value of £300 million. This is a significant cash transaction expected to be completed in the first half of 2025. Importantly, the completion is subject to conditions, indicating a level of uncertainty until finalized.

Post-sale, De La Rue will concentrate on its profitable Currency Division, a potential positive for investors as it aims to bolster its market leadership in this field. The company indicates that it will have net cash on its balance sheet following the completion of the sale, which is a positive sign for liquidity and financial health.

Furthermore, the cash proceeds from the sale will allow De La Rue to repay its existing revolving credit facility entirely, thus reducing leverage and moving towards a net cash position. This is a significant aspect as it improves the balance sheet strength, which can lead to positive investor sentiment.

De La Rue's commitment to addressing its legacy defined benefit pension scheme by paying an additional £12.5 million over the period to April 2027 will further lower pension deficits, which is a responsible move for a long-term financial outlook.

Clive Whiley, the Chairman, emphasized that the sale completion will serve as a 'springboard' for unlocking further intrinsic value within the Group, suggesting potential for future investments and growth. This outlook could positively affect investor confidence in the company's long-term strategic direction.

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