De La Rue sells cash processing business in £3.6 million deal
De La Rue, which prints notes for the Bank of England, said it has sold a business which provides cash sorting machines to major lenders, in a deal worth around £3.6 million.
The Basingstoke-based firm said it had sold its Cash Processing Solutions unit to a company owned by the UK private equity firm Privet Capital.
It said the sale was part of its strategy of disposing of non-core units, in the wake of intense competition and tough trading.
The firm said it expected the processing business to post a loss of £8 million this year, after reporting profits of just £400,000 in 2015.
De La Rue will receive £2.1 million from the sale, and an additional £1.5 million on the first and second-year anniversaries of the deal.
It added it may also receive a payout worth up to £6.5 million if Cash Processing Solutions hits undisclosed performance-related targets after the sale.
De La Rue chief executive Martin Sutherland completed a six-month strategic review in May last year, aimed at boosting the firm's fortunes.
Mr Sutherland said: "Following a root and branch review, we have concluded that whilst Cash Processing Solutions has a good product profile and long-term customer relationships, we do not believe that this is a business which should form part of our portfolio.
"The sale will enable De La Rue to focus on its core business and future growth areas, as well as allow Cash Processing Solutions to achieve its full potential under the new ownership."
De La Rue added it would maintain a long-term "strategic partnership" to ensure that customers from both firms continue to benefit from the relationship.
Charles Pick, analyst at Numis, said: "The sale of CPS is a highly favourable development, given the scale of its loss. The key point is that this is a done deal and De La Rue avoids heavy potential closure costs."