In a development within the global security printing sector, U.S.-based private equity firm Atlas Holdings has agreed to acquire British banknote printer De La Rue for £263 million ($347.1 million). The all-cash deal, priced at 130 pence per share, represents a 16% premium over De La Rue’s closing share price on Monday. De La Rue’s board has endorsed the offer, describing it as “fair and reasonable”.
De La Rue: A Legacy in Currency Printing
Founded in 1821, De La Rue is headquartered in Basingstoke, England, and is renowned as the world’s largest commercial printer of banknotes. The company designs and produces banknotes, secure polymer substrates, and security features for over 69 national currencies. Notably, De La Rue operates the Bank of England’s printing facility at Debden, Essex, under contract.
In recent years, De La Rue has faced challenges due to declining demand for physical currency, driven by the rise of digital payments. In 2023, the company reported that demand for banknotes had fallen to its lowest level in over two decades, with only 15% of payments in the UK made in cash, compared to 60% a decade earlier.
Atlas Holdings: Expanding into Security Printing
Atlas Holdings, a U.S.-based private equity firm, specializes in investing in and operating industrial businesses. The acquisition of De La Rue aligns with Atlas Holdings’ strategy to expand its portfolio in the security printing and authentication sectors.
The deal excludes De La Rue’s authentication division, which is reportedly in advanced stages of being sold to Crane NXT for £300 million ($395.88 million).
Implications for the Industry
This acquisition marks a significant shift in the banknote printing industry, highlighting the challenges faced by traditional currency printers in a rapidly digitizing economy. With the decline in cash usage, companies like De La Rue are under pressure to adapt their business models. The involvement of private equity firms like Atlas Holdings may lead to increased consolidation and a focus on diversification into areas such as digital authentication and security solutions.
For De La Rue, the acquisition could provide the financial backing and strategic direction needed to navigate the evolving landscape of currency and security printing. It also underscores the importance of innovation and adaptability in maintaining relevance in an increasingly digital world.
As the transaction progresses, stakeholders will be closely monitoring how Atlas Holdings plans to integrate De La Rue’s operations and whether this move will set a precedent for further consolidation in the industry.