Shares in De La Rue PLC (LON:DLAR) were on the rise on Wednesday after the group announced the sale of its international identity solutions business to verification specialist HID Corporation in a £42mln deal.
The banknote printer said as part of the deal HID would acquire contracts and software associated with its identity business as well as its passport assembly facilities on the island of Malta. The agreement also included the provision of printing services to HID until March 2022.
READ: De La Rue gets lift as BoE awards it and Australia’s CCL Secure contract to produce polymer for banknotes
De La Rue said the sale would allow it to refocus on identity-related security features and components where the market opportunities were “more accessible”, while strong synergies between identity services and the rest of the company would enable it to make better returns on investment.
The firm added that the proceeds of the sale would go towards strengthening its balance sheet and provide greater flexibility to invest in other growth areas.
The sale is expected to complete before the end of 2019.
Martin Sutherland, De La Rue’s chief executive, said exiting the end to end identify solutions market was the right choice for the group while refocusing on identity-related security features and components was in line with its strategy to transform the company into 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", Sutherland added.
In early trading, the shares were up 2.3% at 306.8p.