Crane Sells Technical Material Division for $72M
|Crane is selling its Technical Material Division for $72 million; some 100 jobs are expected to stay in the area.|
PITTSFIELD, Mass. — Crane & Co. has reached a deal to sell its Technical Material Division for $72 million.
According to spokesman Craig Conrad, Neenah Paper Inc. is purchasing the entire division and plans to retain both the two Pittsfield mills and the employees. The division doubled in size last year with a $5 million investment in the Hubbard Avenue building, which will be taken over by Neenah.
"Neenah Paper's intention is to continue to operate the two mills and keep the current employees," Conrad said, adding that the employee training and knowledge in the technical manufacturing field is a valuable commodity.
The division currently employs about 100.
Crane had put the division on the market at the beginning of this year, according to Conrad, after seeing many of the "global players" consolidate. It was determined that to compete, Crane had to link its division with a larger entity.
"Certainly Neenah is one of the major players," Conrad said. "To take it to the next level, it had to be part of a larger entity."
Neenah, headquartered in Alpharetta, Ga., is a publicly traded company reeling in net sales of approximately $850 million and has 1,875 employees, according to Conrad. Crane's technical division was doing about $50 million per year.
A release from Neenah said the sale is comprised of $64 million for the business and $8 million related to future cash tax benefits.
The Technical Materials Division produces nonwoven products used for filtration and other environmental and industrial uses.
"This acquisition clearly fits our strategy of expanding in profitable, performance-oriented markets with above-average growth rates, and provides a U.S. filtration presence that nicely complements our German-based filtration business," said John O'Donnell, chief executive officer, in a prepared statement released prior to the opening of the stock market Thursday.
"From a financial standpoint, this investment provides an attractive rate of return, is not dilutive to our mid-teen EBITDA (or returns excluding certain deductions) margins, and is accretive to earnings. Most importantly, CTM brings new technologies that provide a platform for future growth and increase our ability to be a global supplier of choice for our customers."
Conrad called the deal "a good fit" because not only does it preserve local jobs but also allows for Neenah to grow the business.
"We think this is a win-win for Crane Technical Materials employees and Neehan Paper," Conrad said.
The move is the latest change in business operations for Crane. It stationary division recently consolidated under one roof in North Adams and it acquired William Arthur Stationery. Meanwhile, its currency division continues operations and has been growing with international contracts.
"We'll certainly use the proceeds from the sale to go back into the business," Conrad said.
The deal with Neenah is expected to close in early July.
"This is a very successful outcome for all parties involved and we welcome Neenah Paper to the Berkshires," said Crane Chief Executive Officer Stephen P. DeFalco in a statement. "We thank all employees who worked to build this business and wish them the best of success in the future."
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