Crane Company · NYSE:CR
Crane — Merger or Acquisition (May 2019)
26 slides from Crane's merger presentation, May 21, 2019
Slide 1: Crane Co. Proposal to Acquire CIRCOR
Crane Co. Proposal to Acquire CIRCOR May 21, 2019 Exhibit 99.4
Slide 2: Forward-Looking Statements–Disclaimer
Forward-Looking Statements–Disclaimer The information in this presentation may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current beliefs, expectations, plans, assumptions and objectives regarding
Slide 3: Today's Presentation
Today’s Presentation 1 2 3 4 PROPOSAL TO ACQUIRE CIRCOR SIGNIFICANT BENEFITS FOR CIRCOR SHAREHOLDERS CIRCOR’S HISTORY OF UNDERPERFORMANCE ATTRACTIVE BUSINESS FIT FOR CRANE CO.
Slide 4: Crane Co. Proposal to Acquire CIRCOR
crane co. proposal to acquire CIRCOR Significant premium No significant hurdles to completion Crane Co. to acquire CIRCOR in an all-cash transaction at $45.00 per share Cash consideration represents a significant premium: 47% over the closing share price on May 20, 2019 37% over the three-month volu
Slide 5: CIRCOR at a glance
CIRCOR at a glance Source: CIRCOR 2018 Form 10-K and press release “CIRCOR Announces Sale of Non-Core Reliability Services Business for $85 Million” dated January 28, 2019. Sales are as reported in the 2018 Form 10-K adjusted for the divestiture of Reliability Services. Fluid – Industrial (Pumps) Sa
Slide 6: CIRCOR's History of Underperformance
circor’S history OF UNDERPERFORMANCE
Slide 7: Chronic underperformance vs. key indices
chronic underperformance VS. KEY INDICES persistent DECLINE in stock price DESPITE acquiring ATTRACTIVE ASSETS Source: Factset | Note: Indexed share price from 12/31/2013 to 5/17/2019; Indexed to 100 | S&P Mid Cap 400 Capital Goods index constituents are equal weighted. ¹ S&P Mid Cap 400 Capital Goo
Slide 8: CIRCOR TSR: single worst performer among peers
circor TSR: SINGLE worst performer among PEERS Total Shareholder Returns ¹,² Source: Factset. ¹ Total shareholder returns from 12/31/2013 to 5/17/2019. ² Assumes dividends are reinvested on ex-date | Adjusted for stock splits and split-offs. ² Peers include S&P Mid Cap 400 Capital Goods Index exclud
Slide 9: From CIRCOR's own 10-K
Source: CIRCOR 2018 Form 10-K. FROM CIRCOR’S OWN 10-K… CIRCOR REPORTS LONG-TERM UNDERPERFORMANCE COMPARED TO MAJOR INDICIES AND SELF-SELECTED PEER GROUP
Slide 10: CIRCOR missed all five-year targets (set in 2014)
CIRCOR missed all Five-Year targets (SET IN 2014) Source: Company filings and presentations, including CIRCOR’s 2014 Investor Day presentation dated 9/10/2014. ¹ Calculated using FY 2013 revenue figure and adding the impact of operations on revenue for subsequent years, as reported in company filing
Slide 11: And appears likely to miss 2020 goals (set in 2017)
…And APPEARS LIKELY TO MISS 2020 goals (SET IN 2017) Source: Company filings and presentations, including CIRCOR’s 2017 Investor Day presentation dated 5/25/2017. ¹ As reported in Q4 2018 earnings press release dated 2/27/2019. ADJUSTED OPERATING MARGIN ADJUSTED EPS ~16% 8.2% 1 $6.65 $2.11 1 little
Slide 12: CIRCOR has been missing its targets for a long time
CIRCOR has been missing its targets for a long time Source: Company filings and presentations, including CIRCOR’s Q4 2010 Earnings Presentation dated 2/24/2011 and Gabelli Conference Presentation dated 2/9/2012. ¹ As reported in CIRCOR’s Q4 2014 earnings release dated 2/28/2015. 2 As reported in CIR
Slide 13: Questionable capital allocation decisions
QUESTIONABLE CAPITAL ALLOCATION DECISIONS Source: Company filings. CIRCOR Spent More Than 4x as Much Cash As IT Generated 2014-2018 cumulative cash deployment 2014-2018 cumulative cash from operations
Slide 14: Undisciplined M&A has destroyed shareholder value
Undisciplined M&A has destroyed Shareholder value… Source: Company filings and FactSet. Note: Enterprise value calculations inclusive of net pension liabilities. ~$1bn Enterprise value (12/30/14) ~$1bn Net value of acquisitions ~$1.5bn Current enterprise value (5/17/19) ~$500mm of lost value + POORL
Slide 15: One of the weakest credit profiles among peers
…AND HAS RESULTED IN CIRCOR HAVING one of the weakest credit profiles among peers Net Debt / LTM EBITDA 6.7x 1.9x 1.8x High financial leverage leaves little room for error Source: Company filings. ¹ Peers include all S&P Mid Cap 400 Capital Goods Index constituents. Note: Total debt adjusted for net
Slide 16: Standalone path to $45 per share not credible
STANDALONE PATH TO $45 per share not credible If CIRCOR continues to trade at current 10.9x enterprise value / EBITDA multiple1, 2020 EBITDA would need to grow ~3X consensus Source: Company filings and Capital IQ. 1 EV/EBITDA multiple is based on current Enterprise Value and 2020 consensus EBITDA as
Slide 17: CIRCOR's history of empty promises
circor’s History of empty promises 2014 Investor Day 2017 Investor Day Actual Performance (2013-2018) 1 Difference “CIRCOR is at an inflection point” “CIRCOR transformation on track” Adjusted EPS from $3.21 to $2.11 1 “Significant margin expansion opportunity” “Significant margin expansion opportuni
Slide 18: A Perfect Fit for Crane
A PERFECT FIT FOR CRANE
Slide 19: Crane has strong track record integrating acquisitions
CRANE HAS STRONG Track Record of Success Integrating acquisitions Payment and Merchandising Technologies Adjusted Operating Margin* PROVEN SUCCESS INTEGRATING ACQUISITIONS AND DELIVERING ENHANCED VALUE TO SHAREHOLDERS * Excludes Special Items. Please see non-GAAP Financial Measures tables for detail
Slide 20: CIRCOR acquisition fits Crane Co. capital allocation plan
CIRCOR acquisition fits crane co. capital allocation plan ~$1.5bn to $2bn Available for M&A and/or Repurchases while Retaining Credit Metrics Consistent with Existing Investment Grade Rating $2.5–$3.0 Billion Available from 2018–2021 Size of acquisition consistent with our previously stated capacity
Slide 21: Win-win shareholder outcome
Win-win shareholder outcome Attractive all-cash, $45 per share proposal for CIRCOR Certain value eliminates significant execution risks associated with CIRCOR’s status quo CIRCOR standalone plan unlikely to generate similar value Crane knows these businesses and can deliver significantly improved op
Slide 22: Additional Information
»>» ADDITIONAL INFORMATION
Slide 23: Additional Information and Where to Find It
Additional Information and Where to Find It This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale
Slide 24: Non-GAAP Explanation
Non-GAAP Explanation Certain non-GAAP measures have been provided to facilitate comparison with the prior year. The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that non-GAAP financial measures which exclu
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures
Slide 26: Investor Contacts
Investor Contacts: Jason D. Feldman Director, Investor Relations 203-363-7329 superiorvalue@craneco.com www.craneco.com Scott Winter / Larry Miller / Gabrielle Wolf Innisfree M&A Incorporated 212-750-5833 Media Contacts: Tom Davies / Molly Morse Kekst CNC 212-521-4873 / 212-521-4826 Tom.davies@kekst