Crane Co. Announces All-Cash Proposal to Acquire CIRCOR at a Significant Premium
May 21 2019 - 6:30AM
Business Wire
- All-cash proposal represents a 47%
premium over the market close yesterday, and 37% and 51% premiums
over the three- and six-month volume weighted average share prices,
respectively
- Provides a superior alternative to
CIRCOR’s prospects as a standalone company
- Provides certainty of value for CIRCOR
shareholders
Crane Co. (NYSE: CR), a diversified manufacturer of highly
engineered industrial products, today announced that it has
submitted a proposal to the Board of Directors of CIRCOR
International, Inc. (NYSE: CIR) or “CIRCOR,” to acquire CIRCOR for
$45 per share in cash. The proposal represents a 47% premium over
yesterday’s closing price and a 37% and 51% premium over a three-
and six-month volume weighted average share price, respectively.
This reflects an enterprise value of approximately $1.7 billion at
a multiple of approximately 13.5x the last 12-month adjusted
EBITDA.
Crane Co. proposed the all-cash transaction to CIRCOR’s
President and CEO Scott Buckhout on April 30, 2019, the terms of
which were confirmed by a letter to the CIRCOR Board of Directors.
On May 13, the CIRCOR Board summarily rejected Crane Co.’s proposal
with no offer of discussions or due diligence.
“While we had hoped to complete a transaction privately, the
Board’s rejection of our proposal without comment or discussion led
to our decision to make our proposal known to CIRCOR shareholders
so they can express their views directly to the CIRCOR Board,” said
Max Mitchell, Crane Co. President and Chief Executive Officer. “Our
proposal provides CIRCOR shareholders with attractive value and
certainty compared to the continued uncertainty surrounding
CIRCOR’s plans to improve operating performance. Based on CIRCOR’s
history of underperformance and inability to meet its own financial
targets, we believe CIRCOR’s standalone plan is unlikely to
generate value comparable to what we are proposing.”
Mr. Mitchell continued, “We believe that this business, which
has great brands and products, has been meaningfully undermanaged
for years. This has resulted in a persistent decline in CIRCOR’s
share price, making it the worst performer of the peers in the
S&P Midcap Capital Goods Index since the end of 2013. Based
upon the strength of our disciplined operating approach, Crane Co.
is well positioned to integrate CIRCOR’s businesses into our
focused portfolio, realize operational synergies, and deliver
long-term value to Crane shareholders. Combining CIRCOR’s Fluid
Handling, Aerospace and Defense assets with Crane’s portfolio of
leading brands would create a stronger competitor with additional
scale and growth potential.”
Crane Co. is highly confident that the proposed transaction
could occur expeditiously:
- Transaction will not be subject to a
financing contingency.
- Significant resources available to
complete confirmatory due diligence.
- Crane and CIRCOR are complementary
businesses with no expected regulatory delays.
Advisors
Crane Co. has retained Wells Fargo Securities as its financial
advisor and Skadden, Arps, Slate, Meagher & Flom LLP as its
legal advisor.
Investor Conference Call
Crane Co. will host a conference call with the financial
community at 8:30 a.m. EDT today. To participate on the conference
call, please dial (877) 407-6184. The live webcast of the investor
call, as well as related presentation materials, will be available
through the Investor Relations section of the company’s website
(www.craneco.com/investors).
Crane Co. is a diversified manufacturer of highly engineered
industrial products. Founded in 1855, Crane Co. provides products
and solutions to customers in the chemicals, oil & gas, power,
automated payment solutions, banknote design and production and
aerospace & defense markets, along with a wide range of general
industrial and consumer related end markets. The Company has four
business segments: Fluid Handling, Payment & Merchandising
Technologies, Aerospace & Electronics and Engineered Materials.
Crane Co. has approximately 12,000 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 are based on management’s current beliefs,
expectations, plans, assumptions and objectives regarding the
future financial performance of Crane Co. (the “Company”) and
CIRCOR International, Inc. (“CIRCOR”) and are subject to
significant risks and uncertainties. Such risks and uncertainties
include, but are not limited to, risks related to the expected
timing and likelihood of completion of a potential transaction
between the Company and CIRCOR, including the risk that the
potential transaction may not occur, and the risk that any
announcements relating to the potential transaction could have
adverse effects on the market price of the Company’s or CIRCOR’s
common stock. Any discussions contained in this presentation,
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 these forward-looking statements. Such factors
are detailed in the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2018, CIRCOR’s Annual Report on Form
10-K for the fiscal year ended December 31, 2018 and subsequent
reports filed with the Securities and Exchange Commission (the
“SEC”), and will be found in the definitive proxy statement that
will be filed with the SEC by CIRCOR if a negotiated transaction is
agreed to. Such reports are available on the SEC’s website
(www.sec.gov). The Company does not undertake to update any
forward-looking statements.
Additional Information and Where to Find It
This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. This communication does
not constitute a solicitation of a proxy from any stockholder. This
communication relates only to a proposal that the Company has made
for a business combination with CIRCOR. In furtherance of the
acquisition proposal, and subject to future developments, the
Company and CIRCOR may file additional relevant materials with the
SEC, including that CIRCOR will file a preliminary proxy statement
on Schedule 14A if a negotiated transaction is agreed to. Following
the filing of the definitive proxy statement with the SEC (if and
when available), CIRCOR will mail the definitive proxy statement
and a proxy card to each stockholder entitled to vote at the
special meeting relating to the proposed transaction. INVESTORS ARE
URGED TO READ THE PROXY STATEMENT IF AND WHEN IT BECOMES AVAILABLE
BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Investors may obtain
the proxy statement, as well as other filings containing
information about the Company and CIRCOR, free of charge, from the
SEC’s Web site (www.sec.gov). Investors may also obtain the
Company’s SEC filings in connection with the transaction, free of
charge, from the Company’s Web site (www.craneco.com).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190521005253/en/
Investors:Jason D. FeldmanDirector, Investor
Relations203-363-7329superiorvalue@craneco.comwww.craneco.com
Scott Winter / Larry Miller / Gabrielle WolfInnisfree M&A
Incorporated212-750-5833
Media:Tom Davies / Molly MorseKekst CNC212-521-4873 /
212-521-4826Tom.davies@kekstcnc.com /Molly.morse@kekstcnc.com
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