CSI Sold to De La Rue, UK Based Cash Processing Business for US $54.5M.

Business Editors

DALLAS--(BUSINESS WIRE)--May 31, 2001

Merger will enhance CSI and De La Rue's global

position in the cash processing market

CSI, a high-speed currency sorting and solution company, has today announced it is being acquired by the Cash Systems division of De La Rue plc., a publicly traded UK based company. De La Rue is paying cash consideration US $35.5m, comprising estimated net shareholders funds of US $9.0m. De La Rue is also assuming CSI's debt, estimated at US$ 19.0m.

CSI provides cash handling solutions, including banknote sorters and software systems for Central Banks, commercial banks, cash in transit companies and other bulk cash operations worldwide. The business's principal manufacturing location and operational headquarters is in Irving, Texas with its commercial headquarters being situated in the UK. It also has a network of sales, service and distribution centres in six other locations worldwide. CSI employs 274 staff of whom, 128 are based in the USA, 82 in the UK and the balance in CSI's other overseas offices.

CSI is the only company in the cash processing industry dedicated solely to high-performance currency processing systems and the provision of advanced cash management solutions. It recorded sales of US $51m in the year to 31 December 2000 and an operating profit of US $5.3m before interest and tax, although this included one off licence fee income of US$ 1m.

De La Rue intends to merge CSI's operations with its existing Cash Processing business and anticipates substantial cost savings as a result of the merger because of the substantial overlap in operations in many areas. A thorough review will be undertaken by both management teams, with appropriate consultation, to establish the size of the opportunity and cost of implementing the savings plan.

De La Rue believes there are excellent synergies between CSI and its Cash Processing business with scope for enhancing revenue where the complementary strengths of the two businesses can be exploited. CSI is strong in the commercial market and has a well developed sorter product range particularly in super fast sorters and multi-denomination sorting systems. De La Rue has strong links with many of the world's Central Banks and a product range with particular strengths in the desktop sorting and desktop counting markets. Geographically, De La Rue is well placed in Africa, Middle East, South and Central America and the Far East, whereas CSI is strong in the UK, US and Australian markets.

The combined business will offer customers unrivalled levels of service and access to leading edge sorting technologies, software, consulting and holistic solutions. The CSI brand will be retained in the combined operations due to its excellent reputation in this market.

Commenting Ian Much, Chief Executive, De La Rue plc said:

"Following the successful reorganisation of Cash Systems over the past two years our strategy is now focused on growth opportunities to expand our global reach and the range of products and solutions we offer to our customers. CSI's large and respected cash processing business is an excellent fit with our own business and enhances our global position in this important market. The combined business will possess market leading expertise and offer a comprehensive range of cash processing solutions to those organisations which handle and process large volumes of cash."

Editors Notes:

1. De La Rue is the world's largest commercial security printer and

paper maker, involved in the production of over 150 national

currencies and a wide range of security documents such as stamps

and vouchers as well as brand protection. The company is also a

leading provider of cash handling equipment and solutions to banks

and retailers as well as a range of identity systems to

governments worldwide. De La Rue also acts as a strategic partner

and adviser to customers offering them total solutions in areas of

activity that capitalise on De La Rue's reputation for security,

integrity and trust.

2. CSI is the only company in the world dedicated solely to

high-performance currency processing systems and advanced

solutions in high-speed and medium-speed currency processing

applications. CSI services central and commercial banks, currency

deposit receivers, armoured car companies, bank note printers,

casinos, and other establishments that require automated handling

of large amounts of currency or other negotiable documents. Its

network of sales, service and distribution centres includes

France, Spain, Netherlands, South Africa, Malaysia and Australia.

3. GD S.p.A. are based in Bologna and specialise in the manufacture

and distribution of packing machines for the tobacco, food, diaper

and large consumption goods industries, as well as machine tools

and fine gearings.

4. De La Rue's Cash Processing business stream accounts for about 15%

of sales within the Cash Systems division. It provides Central and

commercial banks and cash in transit companies with a

comprehensive range of high level cash processing solutions

ranging from banknote sorters to integrated hardware and software.

It also offers a facilities management service tailored to suit

the requirements of each client. The business employs over 300

people with its main manufacturing location situated in

Portsmouth, UK.