Crane Co, a provider of products and services to sectors including cash handling in the casino industry, says the plan to sell the group’s engineered materials business has been terminated, following objections by the United States’ Department of Justice. The company will still get US$7.5 million as a termination fee, according to a Thursday press release.
“Following continued objections from the Department of Justice over a minor overlap in a small segment of the engineered materials business, our agreement to sell that business has been terminated,” said Max Mitchell, Crane’s president and chief executive, as quoted in the release.
Crane had previously announced the US$360-million sale of its engineered materials business to Mexican firm Grupo Verzatec SA de CV. But the U.S. Department of Justice had filed a complaint blocking the deal, due to antitrust concerns.
In its latest release, Crane said the Department of Justice “rejected the initial set of remedies proposed” to allow the deal to be completed. On May 26, the suitor “terminated the sale agreement,” and will pay a US$7.5 million termination fee to Crane, added the document.
Mr Mitchell said the firm would “continue to explore alternatives for the outstanding engineered materials business in due course.”
In other developments, Crane’s CEO said the firm expected to complete the CAD380 -million (US$298.4-million) sale of its Canada-based distribution business, Crane Supply, “at the end of this month”
“We continue to make significant progress with our strategic portfolio actions,” said Mr Mitchell, adding that the group’s planned separation into two independent, public companies was “proceeding according to our original schedule.”
He added: “We continue to believe the separation will permit each post-separation company to optimise investment and capital allocation, accelerate growth, and unlock shareholder value.”
In March, Crane announced a plan to separate into two independent, publicly-traded companies. The plan would see Crane Co cover the aerospace and electronics segment, the process flow technologies business, and integrating now the engineered materials business; while the payment and merchandising technologies business would transform into Crane NXT.
On Thursday, Crane said it was raising its full-year 2022 guidance, to reflect the inclusion of engineered materials’ earnings contribution. Its revised earnings per diluted share guidance is now in a range of US$6.80 to US$7.20, to include approximately US$0.45 earnings per share contribution from engineered materials.
In April, Crane reported a first-quarter net profit of US$105.0 million, down 3.1 percent year-on-year, but up 45.6 percent sequentially.
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