Crane Co. Acquires Crane Currency for USD 800 Million

This week, the diversified manufacturer of highly engineered industrial products, released an official annoncement on the signing of an agreement to purchase 100% of the equity interests in Crane & Co., Inc in the first quarter of 2018. With this acquisition, Crane Co. expects to deliver greater than 10% adjusted EPS growth for the next several years.

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."

Since its foundation in 1801, Crane Currency has specialised in micro-optic security technology and supply of secure and highly engineered banknotes for central banks worlwide. The purchase price represents approximately 8.5x Crane Currency's estimated 2017 adjusted EBITDA of USD 94 million. 

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."

As traspired from press releases, the purchase of Crane Currency is contingent upon regulatory approvals, and Crane Co.intends to finance the acquisition through a combination of cash on hand and additional debt.

Among the figures Mr. Mitchell made public in the latest press release, he mentioned: "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. As per our initial 2018 full year earnings guidance, we can provide estimated $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%. 

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."