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Private equity group snaps up global ID card specialists in £22m deal

Security business Ultra Electronics Holdings plc has announced it has hived off its ID card operation to LDC as it looks to consolidate its portfolio.

The London-based private equity firm, who are part of Lloyds Banking Group, has agreed to pay an initial cash consideration of £22m with additional payments of up to £3m dependent upon growth targets, which Ultra say will be used to reduce the group’s indebtedness.

As part of the deal, all staff and services at Ultra Electronics ID, including employees at offices in the UK, Dubai and China, will transfer to the new business which will operate as Magicard Ltd.

The business itself is a successful one, drawing in revenues of £19.3m with an operating profit of £4m last year, from its instant issuance card printers which it distributes internationally.

Rakesh Sharma, Chief Executive at the security company, explains that, despite the subsidiary’s success, the disposal is part of a wider belt-tightening exercise at the UK firm as it looks for ways to operate more efficiently.

He said: “Over the past two years, Ultra has conducted a comprehensive review of its portfolio of businesses and capabilities, leading to the introduction of our market segment-based organisational structure.

“This appraisal has also allowed us to consolidate our activities, resulting in a clearer strategy for acquisition and disposal. Ultra ID is a sound and profitable business, but one that has become non-core to Ultra’s consolidated portfolio and future plans.

“This first significant divestment by Ultra will allow greater focus on core businesses and longer-term strategy.”

It is hoped the transaction will be completed towards the end of the second quarter, following US regulatory approval.

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