The business, which has manufacturing sites in Wolverhampton and France, has been bought by Spectra Systems Corporation.
Spectra is headquartered in the US and its technology includes machine-readable high-speed banknote authentication, brand protection, and gaming security software.
The two companies have been working together for two years on the development of Spectra’s Fusion polymer banknote substrate.
Regarding the rationale for the deal, Spectra stated: “The international polymer substrate market currently has only two suppliers, CCL Industries in Canada and De La Rue International in the UK. Spectra's research and dialogues with central banks has clearly shown the desire of the banks to have another supplier of ready to print bespoke polymer substrate.
“Spectra has been working with Cartor for two years to achieve high quality conventional and machine-readable, ready for printing polymer substrates which include conductive layers, opacity layers and bespoke window designs as required by central banks.”
The firm said it would enhance its competitive position in the market by further integrating the production supply chain of Fusion.
Dr Nabil Lawandy, founder and CEO of Spectra, commented: "The Spectra board of directors and I are delighted to announce the acquisition of Cartor to solidify our position in the polymer substrate market and expand our business through new sales channels.
“Our experience in working with the Cartor team for two years has been exceptional and I have great confidence in the leadership of the group led by Andrew Brigham [managing director], Ian Brigham [chairman] and Martin French [finance director]. Andrew, Ian and Martin are experienced, innovative, resourceful and energetic individuals, with whom I am excited to work to increase our revenues and earnings over the coming years.”
As well as driving growth in the polymer substrate market, Spectra's board of directors expect to introduce its advanced security technologies into Cartor’s product range, which includes postage stamps, tax and revenue stamps, brand authentication labels and ID documents.
In the year to 30 September 2022 Cartor had sales of just over £16m and EBITDA of £3m.
AIM-listed Spectra posted sales of $19.6m (£15.5m) last year.
The deal will involve £5.5m to be paid in cash on completion, up to £3m to be satisfied by the issue of new shares in Spectra, and a potential further £2m if the Fusion substrate is qualified with a central bank customer within 18 months.
Spectra is also taking on up to £4.5m of Cartor’s external debt as part of the takeover, which is expected to complete this month.
