BASINGSTOKE, UK: De La Rue plc, the world’s premier currency and authentication provider, has agreed the sale of its International Identity Solutions business (International ID) to HID Corporation Limited, an ASSA ABLOY Group company, for a cash consideration of £42 million 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 £37.8 million and an operating profit of £2.3 million. The gross assets of the business were £88 million as at 30 March 2019, of which £38 million will be transferred with the business. The transaction is expected to complete within this calendar year.
Commenting on the transaction, Martin Sutherland, Chief Executive Officer of De La Rue said: “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. 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.”