De La Rue gets authentication unit sale over the line

De La Rue confirmed today that it has completed the £300m (nearly $400m) sale of its authentication division to Crane NXT, allowing it to pay off a hefty loan and plug a hole in its pension scheme.

The transaction will result in the unit being combined with OpSec – which was bought by Crane NXT for $270m last year – to create a new division called Crane Authentication.

Crane NXT, which had sales of $1.5 billion last year, said the transaction complements the authentication and online brand protection technologies of OpSec and expands its portfolio to include security technologies for government-issued identification documents and credentials.

De La Rue Authentication made sales of almost £103m in the last financial year ended March 30, 2024, with the tally in the first half of the current year coming in at £50.2m. It specialises in tax stamps, security labels and other related technologies.

In its latest update, De La Rue said the unit had won another multi-year passport data page programme from an undisclosed country, adding to its similar contract for the Australian passport, but acknowledged that a deal to supply security labels for Microsoft continued to be "subdued."

Completing the transaction has allowed De La Rue to settle a £235m revolving credit facility that was due to be repaid in June, and make a £30m contribution to its pension fund, which has been running at a deficit of around £78m. The company has been in challenging financial circumstances in the last few years and had not paid into the fund since 2023.

The sale of De La Rue Authentication also clears a key obstacle to the proposed sale of the 211-year-old UK company's banknote design and printing division to private equity group Atlas Holdings for £263m.

Crane NXT chief executive Aaron Saak (pictured top) said that De La Rue Authentication is an "excellent strategic fit" for its business and "further enhances our ability to serve as a trusted partner to our customers, leveraging our advanced technology capabilities to provide a broader suite of solutions to highly attractive end markets."

The company said it expects the acquisition will increase its earnings in its first year and said it would update full year guidance as part of its first quarter 2025 earnings release next week.