Historic security printer De La Rue looks set to leave the London Stock Exchange after nearly 80 years as a listed company, with a takeover bid from US private equity group Atlas Holdings agreed by the PLC’s board.
That was the situation as this issue of Printweek went to press, although there was also a potential for rival bids higher than the Atlas offer of 130p a share to emerge, with PSFC Entities tabling a 132.17p offer that was knocked back by De La Rue’s board due to the absence of committed financing.
De La Rue has a long and fascinating history, and it’s a shame that in more recent years the firm has really been through the wringer, buffeted by bad news and strategic mis-steps. The hammer blow of losing the Home Office’s £490m passport contract to continental rival Gemalto had far-reaching consequences; then-CEO Martin Sutherland’s plans to launch a legal challenge to the decision came to naught and for a period the entire future for the company appeared in question.
Sutherland departed in 2019 and was replaced by turnaround specialist Clive Vacher.
Major shareholder and activist investor Crystal Amber Fund was subsequently unhappy with the pace of progress with Vacher’s turnaround plan, which was also impacted by the pandemic and reduced use of banknotes.
In 2022 Crystal Amber called for De La Rue to be sold or broken up, and that year turned into a real annus horribilis for the group with three profit warnings and fears it could breach banking covenants.
Despite another profit warning in spring 2023, by the summer of that year Vacher declared that the business was “stabilised” after a massive £47.1m deck-clearing exercise that included winding down its banknote printing activities in Kenya and terminating its supply agreement with former subsidiary Portals Paper.
A new chairman, Clive Whiley, arrived in May 2023 replacing the embattled Kevin Loosemore.
Commenting on the Atlas bid, Whiley stated: “In a little under two years since I joined De La Rue, we have made profound changes which have benefitted all stakeholders.”
He hailed the Atlas offer as the final step in a successful process, “securing full and complete value realisation and security for all of today’s stakeholders across our financiers, pension trust, employees and shareholders”.
Atlas was founded in 2002, and its first purchase was a small paper mill in rural Indiana. Its approach is described as making each individual acquisition a success over time “brick by brick”.
Away from the reporting spotlight and vagaries of the Stock Exchange, De La Rue’s future will perhaps be focused on making progress “banknote by banknote”.
De La Rue the early years…
1813 Thomas De La Rue launches newspaper Le Miroir Politique in Guernsey
1821 He sets up in London and moves into printing, producing fancy stationery
1831 Registers a patent for the early colour printing of playing cards
1841 First order for railway tickets. By 1846 De La Rue was printing 1.5m every week
1851 Showcases 289 items at the Great Exhibition at Crystal Palace, including an envelope making machine that “drew enormous crowds”
1855 Wins first postage stamp contract
1860 Prints first paper money for the government of Mauritius, with colour and micro-lettering
1898 Family partnership changes to a private company
1921 De La Rue family leave the business
1947 Lists on London Stock Exchange
…and more recent happenings
1999 Sells plastic cards business to French rival Oberthur in £200m deal
2000 Sales of £519m on continuing operations
2008 Sells Cash Systems division to the Carlyle Group for £360m
2009 Wins 10-year UK passport contract previously held by 3M
2010 Oberthur takeover offer for De La Rue at 905p-a-share
2011 Oberthur increases offer to 935p-a-share. De La Rue rejects it
2013 Celebrates 200th anniversary
2014 Sales are just over £513m
2016 Sells Cash Processing Solutions to Privet Capital for £2.1m
2018 Huge row after it emerges that the new post-Brexit passport contract has been awarded to Franco-Dutch group Gemalto. De La Rue also sells a majority stake in its specialist paper business Portals in a £68m deal
2019 Cuts nearly 200 jobs at Gateshead, which unions blame on passport loss. Sells Identity Solutions business to US firm HID Global for £42m. Shares fall to ten-year low
2020 Sales are £426.7m. Three-year turnaround plan announced. More jobs go at Gateshead as banknote printing there ceases
2022 Three profit warnings, auditors qualify accounts with material uncertainty note
2023 Shares tank after yet another profit warning. In discussions with banks about amending covenants. Defers pension deficit repair contributions
2024 Sales are £310m. Agrees £300m sale of Authentication division to Crane NXT. Reports strongest order book in five years. In talks over possible sale of remaining Currency division, and with PSFC Entities about a possible 125p-a-share deal for up to 40% of the business
2025 Boom in orders at Currency wing. On 15 April board recommends £263m, 130p-a-share offer from Atlas Holdings, although rival bids could still emerge
