Crane To Buy Crane Currency For $800 Mln; Backs FY17 Adj. EPS View

(RTTNews) - Crane Co. (CR), a diversified manufacturer of highly engineered industrial products, announced Tuesday that it has signed an agreement to purchase Crane & Co., Inc., called as Crane Currency, for $800 million on a cash free and debt free basis. Further, the company trimmed its fiscal 2017 GAAP earnings guidance, and reaffirming full-Year 2017 adjusted earnings guidance. The company also issued fiscal 2018 forecast.

Crane Co. noted that Crane Currency is being acquired from private equity firm Lindsay Goldberg, members of the Crane family, and other shareholders.

Crane Co. expects that excluding special items, the acquisition would be accretive to earnings per share by $0.15 in the first full year post-closing, increasing to approximately $1.00 by 2021. The closing of the transaction is expected to take place early in the first quarter of 2018.

Crane Currency, founded in 1801, provides advanced micro-optic security technology, and is a fully integrated supplier of secure and highly engineered banknotes for central banks all over the world.

Crane Currency is expected to have 2017 sales of approximately $500 million with adjusted EBITDA of $94 million.

The company noted that 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.

Max Mitchell, President and Chief Executive Officer of Crane Co., said, "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."

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."

Looking ahead for fiscal 2017, the company now expects earnings of $4.38 to $4.48 per share, compared to prior range of $4.41 to $4.51 per share, given incremental transaction related costs anticipated for the fourth quarter of 2017. Excluding transaction related charges, the company continues to expect earnings of $4.45 to $4.55 per share.

On average, 11 analysts polled by Thomson Reuters expect earnings of $4.52 per share for the year. Analysts' estimates typically exclude special items.

Further, the initial 2018 full year earnings guidance is $4.85 to $5.05 per share, excluding any potential impact from the pending acquisition of Crane Currency. This outlook includes a core sales growth assumption of 2% to 4%. Analysts expect earnings of $5.03 per share.