(Bloomberg) -- De La Rue Plc shares surged in London trading after the beleaguered British banknote printer agreed to sell its authentication arm to Crane NXT Co. of the US, precipitating a breakup that will shrink its debt pile and ease its pension deficit.
The cash transaction, which comes almost five months after the company said it was in talks to sell assets, was agreed at an enterprise value of £300 million ($392 million), according to a statement on Tuesday. It’s expected to close in the first half of 2025.
Proceeds will allow De La Rue, which prints banknotes featuring King Charles III, to repay its existing revolving credit facility in full ahead of its maturity on July 1, 2025, the Basingstoke, England-based company said. They’ll also feed contributions to the company’s pension scheme as it shifts to become a pure-play currency provider.
The company is still exploring a long-term solution for the pension scheme, it said.
De La Rue shares traded up 15% as of 9:11 a.m. London time after surging as much as 27% at Tuesday’s open, the most intraday in more than four years. The stock had languished under a string of profit warnings as inflation and pressure on government finances squeezed demand for cash. Last year, the company appointed City veteran Clive Whiley as chairman to add clout after pressure from activist shareholder Crystal Amber.
Crane NXT expects the acquisition to add to adjusted earnings per share in the first full year, the Waltham, Massachusetts-based company said in a separate statement.
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