* Deal to add about 25 cents/shr to Crane earnings within
* Synergies to grow to $25 mln a year pretax by 2015
* Company reaffirms 2012 EPS outlook
* Sees preliminary EPS of $4.05 to $4.20 in 2013
By Sakthi Prasad
Dec 20 U.S. diversified manufacturer Crane Co
said it will buy MEI Conlux Holdings and its Japanese
affiliate for about $820 million from private equity firms Bain
Capital and Advantage Partners to widen its base in making
machines that can handle money through automated mechanisms.
Crane has invested over $220 million to grow its payment
solutions business in recent years and MEI Conlux is the
company's third deal since 2006 in a business segment that
caters to a range of automated money handling solutions, aimed
at the gaming, retail, transportation and vending markets.
In 2006 Crane bought Cash Code, which specializes in bill
validation and dispensing devices, and Telequip, which provides
coin dispensing equipment.
Crane acquired NRI, a European coin validation and
dispensing business, in 1985 as part of the acquisition of
Crane expects the MEI deal to add to earnings within the
first year of acquisition by about 25 cents per share, including
5 cents in synergies.
"We expect synergies to grow to $25 million annually on a
pre-tax basis, or 30 cents per share in 2015," Crane Chief
Executive Eric Fast said in a statement.
MEI is a manufacturer of electronic bill acceptors, coin
mechanisms and other unattended transaction systems. The company
provides products for the vending, gaming, amusement,
transportation, retail and kiosk markets.
"This acquisition is consistent with our strategy of niche
market leadership," Fast said.
Fast also said the MEI deal would materially strengthen the
company's existing payment solutions business, which has grown
through three acquisitions beginning in 2006.
Crane said that it intends to finance the deal through a
combination of cash on hand and additional debt.
MEI Conlux had sales of about $400 million in 2012, and
employs 820 people worldwide. Crane's payment solutions business
had annual sales of $175 million. On a pro forma basis, the
combined sales of MEI and Crane Payment Solutions would be about
$575 million in 2012.
The company said it continues to expect 2012 earnings in the
lower half of the previously communicated outlook range of $3.75
to $3.85 per share.
Analysts, on average, were expecting 2012 earnings of $3.75
per share, excluding special items, according to Thomson Reuters
Also, the company's preliminary outlook for 2013 includes
core sales growth of between 2-4 percent, excluding acquisition
and foreign exchange impacts, and earnings per share in a range
of $4.05 to $4.20. Analysts are expecting the company to earn
Bain Capital is one of the world's biggest private equity
firms with about $67 billion in assets under management.
Advantage Partners is a private equity firm based in Japan,
which established the first buyout fund in the country in 1997,
according to its website.