Crane Holdings Co, a provider of products to sectors including the casino industry, says it has signed credit agreements that will provide an aggregate amount of US$1.65 billion in new syndicated revolving credit and term loan facilities. The fresh funds will support the split of the group into two separate entities, it said in a Monday press release.
Crane Holdings had announced last year that the group intended to split into two independent, publicly-traded companies. Earlier this year, it said it expected to complete the separation on April 3 this year. Crane Holdings will retain the payment and merchandising technologies businesses, and will be renamed Crane NXT Co.
Under a tax-free spin-off, the aerospace and electronics, process flow technologies, and engineered materials businesses will be under a new entity called Crane Co.
“The new financings ensure that, upon separation, Crane Co and Crane NXT will each have strong and flexible balance sheets, enabling them to execute on their growth strategies,” said Richard Maue, Crane Holdings executive vice president and chief financial officer, cited in Monday’s announcement.
He added: “Both companies have a rigorous and disciplined approach to capital allocation, and I am confident that both are positioned to drive long-term shareholder value.”
For Crane NXT, the new financing includes a US$500-million five-year revolving credit facility and a US$350-million three-year term loan. Crane NXT will also retain US$545 million of the group’s long-term, fixed rate notes.
“We expect Crane NXT will have approximately US$200 [million] to US$250 million of cash at the time of separation, resulting in net debt – total debt less total cash – of approximately US$645 [million] to US$695 million,” stated the group.
In an investor presentation event earlier this month, the head of Crane NXT said the company was aiming to achieve sales of US$1.3 billion this year, with a “high-20s of percent” in terms of adjusted earnings before interest, taxation, depreciation and amortisation margin.
For Crane Co, the new financing includes a US$500-million five-year revolving credit facility and a US$300-million three-year term loan. The group said it expected the proceeds from the term loan to be used to pay a dividend of up to US$300 million to Crane Holdings, with the “remaining proceeds, if any, to be used for general corporate purposes by Crane Co”.
