De La Rue Sells International Identity Solutions Business.
M2 EQUITYBITES-June 14, 2019-De La Rue Sells International Identity Solutions Business
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14 June 2019 - UK-based banknote manufacturer, security printing and papermaking company De La Rue plc (LSE: DLAR) is exiting the prime system integration in the identity market with the sale of International Identity Solutions business for a cash consideration of GBP 42m (USD 52.87m), the company said.
The deal allows De La Rue to refocus on identity-related security features and components to maximise technology and customer synergies with the rest of the group.
It also strengthens De La Rue's balance sheet and enables the group to focus on other strategic growth areas such as product authentication and traceability and security features.
De La Rue has agreed the sale of its International Identity Solutions business to HID Corp. Ltd., an Assa Abloy Group company, for a cash consideration of GBP 42m on a cash free debt free basis, payable upon completion.
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 agreement also includes De La Rue providing printing services to HID Global until March 2022. The UK passport contract is outside the scope of the agreement.
This transaction will allow the group to refocus on identity-related security features and components where the market opportunities are more accessible.
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 GBP 37.8m and an operating profit of GBP 2.3m (post allocated corporate overhead). The gross assets of the business were GBP 88m as at 30 March 2019, of which GBP 38m will be transferred with the business.
The transaction is expected to complete within this calendar year.
This transaction constitutes a class 2 transaction for the purposes of the Financial Conduct Authority's Listing Rules.
The person responsible for the release of this announcement on behalf of De La Rue plc is Helen Willis (chief financial officer).
The Assa Abloy Group is in access solutions. The group operates worldwide with 48,500 employees and sales of SEK 84bn. The Group has leading positions in areas such as efficient door openings, trusted identities and entrance automation.
Headquartered in Austin, Texas, HID Global has over 3,000 employees worldwide and operates international offices that support more than 100 countries. HID Global is an Assa Abloy Group brand.
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|Publication:||M2 EquityBites (EQB)|
|Date:||Jun 14, 2019|
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