- Positions Crane Co. to be one of the
leading global players in the currency & payment market
- With this acquisition, Crane Co.
expects to deliver greater than 10% adjusted EPS growth for the
next several years
Crane Co. (NYSE: CR), a diversified manufacturer of highly
engineered industrial products, announced that it has signed an
agreement to purchase 100% of the equity interests in Crane &
Co., Inc. (“Crane Currency”) from private equity firm Lindsay
Goldberg, members of the Crane family, and other shareholders, for
$800 million on a cash free and debt free basis.
Founded in 1801, Crane Currency is a pioneer in advanced
micro-optic security technology, and a fully integrated supplier of
secure and highly engineered banknotes for central banks all over
the world. The purchase price represents approximately 8.5x Crane
Currency’s estimated 2017 adjusted EBITDA of $94 million. (Please
see the attached Non-GAAP Financial Measures tables.)
Mr. Max Mitchell, President and Chief Executive Officer of Crane
Co., said, “We are extremely excited to announce this transaction,
which will be Crane Co.’s second largest ever, and brings together
two companies with nearly 380 years of combined history. Crane
Currency is the fastest growing, fully integrated global currency
provider in the growing global banknote supply and security
industry. Making it part of Crane Co. is a logical extension of our
expanding presence in the currency and payment markets. Our
combined businesses will be able to offer end-to-end currency and
security solutions, from substrate manufacturing and banknote
design and printing to micro-optics and banknote validation.”
Crane Currency is expected to have 2017 sales of approximately
$500 million with adjusted EBITDA of $94 million. Excluding Special
Items, the acquisition is expected to be accretive to EPS by $0.15
in the first full year post-closing, increasing to approximately
$1.00 by 2021. (Please see the attached Non-GAAP Financial Measures
tables.)
Mr. Mitchell continued: “This transaction meets all of Crane
Co.’s strategic and financial criteria for acquisitions, and we
believe it provides us a path to greater than 10% adjusted EPS
growth annually for the next several years.”
The purchase of Crane Currency is contingent upon regulatory
approvals and customary closing conditions. Crane Co. intends to
finance the acquisition through a combination of cash on hand and
additional debt. Commitments are in place to cover 100% of the
financing needs in order to facilitate the closing of the
transaction, which is expected to take place early in the first
quarter of 2018.
Mr. Mitchell concluded: “I would also like to acknowledge the
effort and success of the extended Crane family, as well as the
current Crane Currency management team led by CEO Stephen DeFalco.
Over the past 15 years, they have transformed Crane Currency from a
U.S. focused substrate manufacturer to a global leader in
micro-optics and currency security solutions, as well as banknote
design and printing. We are honored to welcome Crane Currency, with
its strong legacy and track record, into our company, Crane
Co.”
Updating Full-Year 2017 GAAP Earnings Guidance, and
Reaffirming Full-Year 2017 Adjusted Earnings Guidance
We expect 2017 earnings of $4.38-$4.48 per diluted share,
compared to our prior range of $4.41-$4.51 per diluted share, given
incremental transaction related costs anticipated for the fourth
quarter of 2017. Excluding transaction related charges, we continue
to expect earnings of $4.45-$4.55 per diluted share. (Please see
the attached Non-GAAP Financial Measures tables.)
Introducing Preliminary 2018 Full Year Earnings
Guidance
Our initial 2018 full year earnings guidance is $4.85-$5.05 per
diluted share, excluding any potential impact from the pending
acquisition of Crane Currency. This outlook includes a core sales
growth assumption of +2% to +4%. Additional details on 2018
earnings guidance will be provided in January on Crane Co.’s fourth
quarter 2017 earnings conference call.
Conference Call Information
Crane Co. will host a conference call on Wednesday, December 6,
at 8:00 a.m. Eastern time to provide further details about the
transaction. Please refer to the company’s website www.craneco.com
to access the call and accompanying presentation slides which will
be posted on Tuesday evening, December 5.
About Crane Currency
Crane Currency has been a global producer of currency products
for more than 200 years and is entrusted by more than 50 central
banks to play an integral role in the design and manufacture of
their nations’ banknotes. From substrates to the most advanced
micro-optic security elements and design, Crane Currency is a
responsive partner focused on delivering innovative products and
solutions that meet customers’ most demanding requirements.
About Crane Co.
Crane Co. is a diversified manufacturer of highly engineered
industrial products. Founded in 1855, Crane Co. provides products
and solutions to customers in the hydrocarbon processing,
petrochemical, chemical, power generation, unattended payment,
automated merchandising, aerospace, electronics, transportation and
other markets. The Company has four business segments: Fluid
Handling, Payment & Merchandising Technologies, Aerospace &
Electronics and Engineered Materials. Crane has approximately
11,000 employees in the Americas, Europe, the Middle East, Asia and
Australia. Crane Co. is traded on the New York Stock Exchange
(NYSE:CR). For more information, visit www.craneco.com.
This press release may contain forward-looking statements as
defined by the Private Securities Litigation Reform Act of 1995.
These statements present management’s expectations, beliefs, plans
and objectives regarding future financial performance, and
assumptions or judgments concerning such performance. Any
discussions contained in this press release, except to the extent
that they contain historical facts, are forward-looking and
accordingly involve estimates, assumptions, judgments and
uncertainties. There are a number of factors that could cause
actual results or outcomes to differ materially from those
addressed in the forward-looking statements. Such factors are
detailed in the Company’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2016 and subsequent reports filed with the
Securities and Exchange Commission.
(CR-G)
(Financial Tables Follow)
Crane & Co., Inc. ("Crane Currency") Non-GAAP
Financial Measures (in millions)
2017
Reconciliation of Net Income to EBITDA and Adjusted
EBITDA Estimated Net
Income $ 29 Income Taxes 16 Interest Expense 8 Depreciation
& Amortization 25
EBITDA $ 78
EBITDA $ 78 Non-Recurring Litigation Costs 4 Non-Recurring
Print Facility Costs 9 Pension, Post-Retirement, and Stock
Compensation Expense 3
Adjusted EBITDA $ 94
Transaction Price $ 800
Price / Adjusted EBITDA
8.5x
CRANE CO. Guidance 2017 Full Year
Guidance 2017 Earnings Per Share Guidance
Low High Earnings Per Share - GAAP basis $
4.38 $ 4.48 Transaction related
charge - Net of Tax 0.07 0.07 Earnings Per Share -
Non-GAAP basis $ 4.45 $ 4.55
Certain non-GAAP measures have been provided to facilitate
comparison with the prior year.
The Company reports its financial results in accordance with
U.S. generally accepted accounting principles (GAAP). However,
management believes that non-GAAP financial measures which exclude
certain non-recurring items present additional useful comparisons
between current results and results in prior operating periods,
providing investors with a clearer view of the underlying trends of
the business. Management also uses these non-GAAP financial
measures in making financial, operating, planning and compensation
decisions and in evaluating the Company's performance.
Non-GAAP financial measures, which may be inconsistent with
similarly captioned measures presented by other companies, should
be viewed in addition to, and not as a substitute for, the
Company’s reported results prepared in accordance with GAAP.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171205006376/en/
Crane Co.Jason D. Feldman, 203-363-7329Director, Investor
Relationswww.craneco.com
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