Crane Company Announces Close of Engineered Materials Divestiture

Rhea-AI Summary

Crane Company (NYSE:CR), an industrial manufacturing and technology company, has completed the divestiture of its Engineered Materials business unit to KPS Capital Partners, LP. The transaction, which was previously announced, marks a significant strategic move for the company.

Positive

• Strategic divestiture completed, potentially streamlining operations and focusing on core business segments

Negative

• None.

Insights

Investment Banker

The closure of Crane's Engineered Materials divestiture to KPS Capital Partners represents a strategic portfolio optimization move. The divestment aligns with Crane's focus on strengthening its core industrial technology and manufacturing capabilities. With a market cap of $8.6 billion, this transaction enhances Crane's balance sheet flexibility and allows for more targeted capital allocation toward higher-growth segments. KPS's expertise in industrial manufacturing makes them a suitable buyer for the Engineered Materials unit, which primarily produces fiberglass reinforced plastic panels. The deal's completion signals Crane's commitment to streamlining operations and pursuing value-creating opportunities in their core competencies.

The divestiture's timing, coinciding with the start of 2025, positions Crane to begin the year with a more focused business model. This strategic realignment could potentially lead to improved operational efficiency and better capital returns for shareholders. While specific transaction terms aren't disclosed, the sale likely provides Crane with additional financial resources to invest in growth initiatives or return capital to shareholders.

Manufacturing Industry Analyst

The completion of this divestiture marks a significant operational restructuring for Crane Company. The Engineered Materials segment, known for specialized composite materials and building products, represented a non-core business unit within Crane's portfolio. This strategic exit allows management to concentrate resources on their primary industrial technology solutions and process flow technologies. KPS Capital Partners, with their strong track record in industrial manufacturing turnarounds, can potentially unlock more value from the Engineered Materials business as a standalone entity.

From an operational perspective, this move reduces complexity in Crane's business model and could lead to improved margins and operational metrics. The consolidation of focus on core industrial technologies aligns with broader industry trends where companies are streamlining their portfolios to enhance competitiveness and market positioning. This transaction demonstrates Crane's commitment to portfolio optimization and operational excellence.

STAMFORD, Conn.--(BUSINESS WIRE)-- Crane Company (NYSE:CR) (“Crane” or the “Company”), a premier industrial manufacturing and technology company, today announced that it has closed on the previously announced divestiture of its Engineered Materials business to KPS Capital Partners, LP (“KPS”).

About Crane Company

Crane Company has delivered innovation and technology-led solutions to its customers since its founding in 1855. Today, Crane is a leading manufacturer of highly engineered components for challenging, mission-critical applications focused on the aerospace, defense, space and process industry end markets. The Company has two strategic growth platforms, Aerospace & Electronics and Process Flow Technologies. Crane has approximately 7,500 employees in the Americas, Europe, the Middle East, Asia and Australia. For more information, visit www.craneco.com.

About KPS Capital Partners

KPS, through its affiliated management entities, is the manager of the KPS Special Situations Funds, a family of investment funds with approximately $21.4 billion of assets under management (as of September 30, 2024). For over three decades, the Partners of KPS have worked exclusively to realize significant capital appreciation by making controlling equity investments in manufacturing and industrial companies across a diverse array of industries, including basic materials, branded consumer, healthcare and luxury products, automotive parts, capital equipment, and general manufacturing. KPS creates value for its investors by working constructively with talented management teams to make businesses better and generates investment returns by structurally improving the strategic position, competitiveness, and profitability of its portfolio companies, rather than primarily relying on financial leverage. The KPS Funds’ portfolio companies currently generate aggregate annual revenues of approximately $23.7 billion, operate 251 manufacturing facilities in 30 countries, and have approximately 65,000 employees, directly and through joint ventures worldwide (as of September 30, 2024, pro forma for recent acquisitions). The KPS investment strategy and portfolio companies are described in detail at www.kpsfund.com.

KPS Mid-Cap focuses on investments in the lower end of the middle market that require up to $200 million of initial equity capital. KPS Mid-Cap targets the same type of investment opportunities and utilizes the same investment strategy that KPS’ flagship funds have employed for over three decades. KPS Mid-Cap leverages and benefits from KPS’ global platform, reputation, track record, infrastructure, best practices, knowledge and experience. The KPS Mid-Cap investment team is managed by Partners Pierre de Villeméjane and Ryan Harrison, who lead a team of experienced and talented professionals.

Forward-Looking Statements Disclaimer

This press release contains forward-looking statements within the meaning of the federal securities laws. Any statements contained in this press release, except to the extent that they contain historical facts, are forward-looking and accordingly are based on management’s current assumptions, expectations, and beliefs. Forward-looking statements are subject to risks and uncertainties that could lead to actual results differing materially from those expected or implied. Risk factors are discussed in the Company’s filings with the Securities and Exchange Commission. Crane assumes no (and disclaims any) obligation to revise or update any forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250102760937/en/

Jason D. Feldman, SVP, Investor Relations, Treasury & Tax

Allison Poliniak, VP Investor Relations

IR@craneco.com

www.craneco.com

Source: Crane Company

FAQ

What is the impact of Crane's Engineered Materials divestiture on CR stock?

The divestiture of Crane's Engineered Materials business to KPS Capital Partners represents a strategic move that could streamline operations, though specific financial impact details weren't disclosed in the announcement.

When did Crane Company (CR) complete the sale of its Engineered Materials division?

Crane Company announced the completion of the Engineered Materials division sale to KPS Capital Partners, LP on the date of this press release.

Who acquired Crane's Engineered Materials business?

KPS Capital Partners, LP acquired Crane Company's Engineered Materials business division.

What business segments remain in Crane Company (CR) after the Engineered Materials sale?

While the press release confirms the divestiture of the Engineered Materials segment, it doesn't specify the remaining business segments in Crane Company's portfolio.