Ultra Electronics to sell ID business

Ultra Electronics has agreed to sell its global ID business, Ultra Electronics ID, to private equity firm LDC, for an initial £22m in cash, with additional payments of up to £3m subject to earnings growth over the next two years.

Ultra said the proceeds of the disposal will be used to reduce group indebtedness.

As part of the deal, which is expected to close towards the end of the second quarter, all of the ID management team will transfer with the business and following the divestment, Ultra Electronics ID will operate as Magicard Ltd.

UK-based ID designs and manufactures proprietary, instant issuance card printers and associated consumables. Its products, which are sold internationally through a broad distributor network and include direct-to-card and reverse transfer printers, are capable of printing and encoding all types of card format.

For the year ended 31 December 2015, the ID business had revenues of £19.3m and operating profit of £4.0m.

Chie executive Rakesh Sharma 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.”