Private equity firm agrees takeover of De La Rue

Currency printer De La Rue has agreed to be bought by private equity group Atlas Holdings in a £263m ($347m) deal, sparking a surge in its share price.

The 211-year-old company – which is also in the midst of the £300 million sale of its authentication division to Crane NXT – confirmed that it is backing the Atlas offer over a higher, rival bid from an investment group (Pension SuperFund Capital or PSFC) led by entrepreneur Edi Truell.

The new 130p-per-share offer is a 16% premium over De La Rue's closing share price yesterday, and just below an improved bid from PFSC reported to be just over 132p per share.

The group initially put forward a 125p-per-share proposal which valued the company at £246m but had some uncertainties about the level of committed funding, the structure of the deal, and pension agreements, according to a Reuters report.

De La Rue's stock has already been rising steadily this year amid all the takeover speculation, rising 29% to drive its market cap north of £245m, and its shares were up more than 17% to 12p at the time of writing.

In a stock exchange filing, De La Rue said Atlas is convinced that its currency operations – focused on the design and manufacture of highly secure banknotes and banknote components – represent "an attractive opportunity to build on its portfolio of manufacturing and key infrastructure businesses."

It added: "Atlas's core investment strategy is to acquire industrial companies which have a clear 'reason to exist', but which may be under-appreciated by other owners or the public equity markets."

After the sale of the authentication business, De La Rue "will be an industry leader, highly valued by its customers, but operates in a mature, competitive and cyclical industry [and] Atlas believes that a company with this type of earnings profile is best owned by a long-term investor which is prepared to accept earnings cyclicality and a challenging end market outlook."

De La Rue said its board met on Monday evening to consider its options and had concluded that the Atlas offer was more viable.

"Atlas is the right partner to take De La Rue into its next phase of growth," said chief executive Clive Vacher.

"Most importantly, under Atlas's ownership we can ensure long-term stability for our customers and our people, and best position the business for its next chapter."