STAMFORD, Conn.–(BUSINESS WIRE)–Crane Holdings, Co. (NYSE: CR), a diversified manufacturer of highly engineered industrial products, today announced the signing of credit agreements that will provide an aggregate principal amount of $1.65 billion in new syndicated revolving credit and term loan facilities for Crane Company and the Company, which will be renamed Crane NXT, Co. The new facilities are intended to support Crane’s previously announced plan to separate into two independent and simplified businesses, which we expect to complete on April 3, 2023.
Richard Maue, Crane Executive Vice President & Chief Financial Officer, stated: “The new financings ensure that, upon separation, Crane Company and Crane NXT will each have strong and flexible balance sheets, enabling them to execute on their growth strategies. 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.”
Post-Separation Crane Company Capital Structure and Financing Details
For Crane Company, the new financing includes a $500 million five-year revolving credit facility and a $300 million three-year term loan. Immediately following the separation, we expect that Crane Company’s only outstanding debt will be the new $300 million term loan and that the revolving credit facility will be undrawn. It is expected that the proceeds from this term loan will be used to pay a dividend of up to $300 million to Crane, with remaining proceeds, if any, to be used for general corporate purposes by Crane Company. We expect Crane Company will have approximately $150 to $200 million of cash at the time of the separation, resulting in net debt (total debt less total cash) of approximately $100 to $150 million.
Based on previously issued guidance for the 2023 fiscal year, which reflected pro forma EBITDA of approximately $321 million, Crane Company’s net debt-to-EBITDA at separation is expected to be less than 0.5x. It is anticipated that the strong post-separation balance sheet of Crane Company will support financial capacity for potential acquisitions of approximately $1 billion at the time of separation, growing to approximately $4 billion by 2028, as discussed at Crane Company’s March 9, 2023 Investor Conference (a replay is available on Crane’s website at www.craneco.com).
Post-Separation Crane NXT, Co. Capital Structure and Financing Details
For Crane NXT, the new financing includes a $500 million five-year revolving credit facility and a $350 million three-year term loan. Crane NXT will also retain $545 million of Crane’s long-term, fixed rate notes. We expect Crane NXT will have approximately $200 to $250 million of cash at the time of separation, resulting in net debt (total debt less total cash) of approximately $645 to $695 million.
Based on previously issued guidance for the 2023 fiscal year, which reflected pro forma EBITDA of approximately $364 million, Crane NXT’s net debt-to-EBITDA at separation is expected to be approximately 1.5x to 2x. It is anticipated that the strong post-separation balance sheet of Crane NXT will support financial capacity for potential acquisitions of approximately $1 billion at the time of separation, growing to approximately $3 billion by 2027, as discussed at Crane NXT’s March 9, 2023 Investor Conference (a replay is available on Crane’s website at www.craneco.com).
Additional Financing Details
JPMorgan Chase Bank, N.A. acted as the administrative agent, and lead-left bookrunner and joint lead arranger, for the syndicate of 14 banks. Joint bookrunners and joint lead arrangers included Bank of America, Goldman Sachs, TD Bank, U.S. Bank, and Wells Fargo.
About Crane Holdings, Co. and the Upcoming Separation Transaction
Crane Holdings, Co. is a diversified manufacturer of highly engineered industrial products. Founded in 1855, Crane provides products and solutions to customers across end markets including aerospace, defense, chemical and petrochemical, water and wastewater, payment automation, and banknote security and production, as well as for a wide range of general industrial and consumer applications. The Company has four business segments: Aerospace & Electronics, Process Flow Technologies, Payment & Merchandising Technologies, and Engineered Materials. Crane has approximately 11,000 employees in the Americas, Europe, the Middle East, Asia and Australia. For more information, visit www.craneco.com.
