Crane Company · NYSE:CR
Crane — Merger or Acquisition (December 2017)
31 slides from Crane's merger presentation, Dec 5, 2017
Slide 1: Crane Currency acquisition announcement call
Crane Currency acquisition announcement call December 6, 2017
Slide 2: Forward-Looking Statements - Disclaimer
Forward-Looking Statements - Disclaimer 2 » www.craneco.com The information in this presentation includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than historical information or statements
Slide 3: Crane Currency Acquisition
Crane Currency Acquisition 3 » www.craneco.com Transaction Overview and Strategic Rationale Financial Summary and Value Creation Crane Currency Introduction Summary
Slide 4: Acquisition Snapshot
Acquisition Snapshot Expect to Close First Quarter 2018 Agreement to purchase 100% of the equity of Crane & Co., Inc. (“Crane Currency”)Fully integrated global supplier of banknotes and leader in security technology for currencyPurchase PriceAll cash transaction$800 million on a “cash free” and “deb
Slide 5: Combination of Two Historic Companies
1855 Founded 1801 Stamford Headquarters Boston Foundry based businessin Chicago Began as Paper mills in New England Global, diversifiedmanufacturer of highlyengineered industrial products Today Global, fully integrated supplierof banknotes; full portfolio of security solutions ~11,000 Employees150 L
Slide 6: Significant Value Creation
Significant Value Creation * Based on the midpoint of 2017 and 2018 EPS guidance, excluding Special Items. Please see non-GAAP Financial Measures tables for details. Further Upside Possible from Additional Capital Deployment Acquisition Provides Path to Better Than 10% Adjusted EPS CAGRfor Next Seve
Slide 7: Sophisticated Technology Highly Engineered Solutions
Sophisticated Technology Highly Engineered Solutions
Slide 8: Long History of Acquisitions
Long History of Acquisitions Substantial Addition to Our Portfolio 2nd Largest Acquisition in Crane Co.'s History
Slide 9: Experienced Acquirer in the P&MT Space
Experienced Acquirer in the P&MT Space 1985 1997 1999 2000 2006 2010 2013 2017
Slide 10: Track Record of Success
Track Record of Success * Excludes Special Items. Please see non-GAAP Financial Measures tables for details. Successful M&A Execution Track Record Payment & Merchandising Technologies ~1900 bps Improvement
Slide 11: Crane Currency Acquisition
Crane Currency Acquisition 11 » www.craneco.com Transaction Overview and Strategic Rationale Financial Summary and Value Creation Crane Currency Introduction Summary
Slide 12: Guidance Update
Guidance Update On-Track for 2017; Expect Accelerating Core Sales in 2018 Reaffirming 2017 adjusted EPS guidanceGAAP EPS of $4.38-$4.48 (was $4.41-$4.51) given incremental transaction related costsAdjusted* EPS of $4.45-$4.55Introducing preliminary 2018 EPS guidanceCore sales +2% to +4%EPS of $4.85-
Slide 13: Key Transaction Details and Metrics
Key Transaction Details and Metrics Attractive Multiple and Compelling Value Creation $800 million purchase price on a cash free/debt free basis2017E adjusted EBITDA* of ~$94 million and Sales ~$500 millionRepresents ~8.5x 2017 adjusted EBITDAMeets all strategic and financial M&A criteriaExpect $0.1
Slide 14: Capital Allocation
Capital Allocation * Company forecasts based on rating agency methodologies. Expect to De-Lever Rapidly via Short-term Debt Repayment and EBITDA Growth Target 2x–3x adjusted debtto EBITDAExpect to be disciplinedand maintain current investment grade ratingNear-term: No repurchases Retain bolt-on M&A
Slide 15: Flexibility for Capital Deployment
Flexibility for Capital Deployment Additional Value Creation Potential 2018–2021 Capital Deployment ~$1.5B Available for M&A and/or Repurchases while Retaining Investment Grade Credit Metrics
Slide 16: P&MT Segment Post-Acquisition
P&MT Segment Post-Acquisition Crane Currency Nearly as Large as CPI Payment & Merchandising Technologies (2017E Sales of ~$770M) Payment & Merchandising Technologies(2017E Pro Forma Sales of ~$1.3B)
Slide 17: Crane Co. Post-Acquisition Portfolio Increasingly Positioned for Growth
Crane Co.(2017E Sales of ~$2.8B) Crane Co. Post-Transaction(2017E Pro Forma Sales of ~$3.3B) Crane Co. Post-Acquisition Portfolio Increasingly Positioned for Growth Fluid Handling Payment & Merchandising Technologies Aerospace & Electronics Engineered Materials Fluid Handling Payment & Merchandising
Slide 18: Crane Currency Acquisition
Crane Currency Acquisition 18 » www.craneco.com Transaction Overview and Strategic Rationale Financial Summary and Value Creation Crane Currency Introduction Summary
Slide 19: Crane Currency at a Glance
Crane Currency at a Glance One of Three Global Fully Integrated Providers Fully integrated global currency providerBanknote designSubstrate manufacturingBanknote printingSecurity technologies2017E Sales~1/3 U.S. vs. ~2/3 International
Slide 20: Strong Position in Attractive Market
Strong Position in Attractive Market 2nd Largest Player in Served Market ~$4.4 Billion Addressable Market Currency Security Features CurrencySubstrate BanknotePrinting Bill and Coin Validation
Slide 21: Global Banknote Issuance is a Steady Growth Market
Global Banknote Issuance is a Steady Growth Market Banknote Production Continues to Grow Source: Company and industry research Expect Market Trends to Remain Favorable 4.5% CAGR
Slide 22: Growing Demand for Advanced Security Features
Growing Demand for Advanced Security Features Security Content Per Note is Growing Security Features Expected to Drive Revenue Growth Across more and more denominationsBecoming larger proportion of total banknote spend Illustrative Cost Structure Per Note 35%+ 2x Increase
Slide 23: Crane Currency Has Transformed Itself
Crane Currency Has Transformed Itself *Purchased Swedish Substrate Mill From Substrate to a Leader in Design, Printing, and Security ~13% Sales CAGR 68 ~500
Slide 24: Pioneer in Micro-Optics
Pioneer in Micro-Optics Security Portfolio Provides Path to Growth Global Industry Leader in Micro-Optic Security Security built into substrate and/or added at printSecurity features increasingly added to smaller denomination notesFull portfolio of micro-optic solutions with numerous optionsNever be
Slide 25: Summary
Summary More to Come on March 1 at Investor Day… 2nd largest deal in our history Extremely attractive metrics and value creationHighly engineered solutions for a growth marketGreat adjacency to existing Payment business
Slide 26: Appendix: Non-GAAP Information
Appendix 26 » www.craneco.com Non-GAAP Information
Slide 27: Non-GAAP Explanation
Non-GAAP Explanation 27 » www.craneco.com 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
Slide 28: Non-GAAP Financial Measures
Non-GAAP Financial Measures 28 » www.craneco.com
Slide 29: Non-GAAP Financial Measures
Non-GAAP Financial Measures 29 » www.craneco.com
Slide 30: Non-GAAP Financial Measures
Non-GAAP Financial Measures 30 » www.craneco.com
Slide 31: Slide 31