Crane Currency Being Acquired by Global Manufacturing Company
DALTON, Mass. — Crane Currency's acquisition by a Connecticut-based firm with a strikingly similar name is good news for the region, say Crane officials.
Crane Co. of Stamford, Conn., announced late Tuesday it would purchase the nearly 200-year-old banknotes operation for $800 million.
Stephen DeFalco, chief executive officer of Crane Currency, said nothing in the short-term will change for the Dalton production facilities, where U.S. currency paper is produced. The currency department, part of Crane & Co., employs about 600 people in Dalton.
"The Dalton facility plays a very important role in the U.S. currency program and none of that is going to change," DeFalco said on Wednesday. "Nor will any of the management change or the employment. ...
"I think over the longer haul, it's a positive. They bring some complementary technologies that help us to help our central bank clients around the world."
Crane Co. was founded by a different Crane — Richard — in 1855 and has had, until now, no affiliation with the Dalton papermaking company that Zenas Crane moved from the Boston area back in 1801.
Where Zenas' company concentrated on fine papermaking and currency, Richard was a Chicago purveyor of pipes and steam pumps, and his company expanded into manufacturing, electronics, aerospace and technology in the ensuing century. It now has some 11,000 employees in 26 countries.
Among its interests is banknote authentication technology used in vending machines and other automated machines.
"They make all of the technology for the banknote authenticators that are out in the retail environment," DeFalco said. "Everytime a banknote touches a vending machine or self-serve kiosk at Home Depot or something like that, they're behind a lot of that technology. ...
"Now we can go to a central bank and say we're not only going to make you a beautiful bank note that's secure and can't be counterfieted but now when it gets out in the retail space it will work well."
The merging of the two companies will combine the capablities of both: security features and authentication features.
"We are extremely excited to announce this transaction, which will be Crane Co.'s second largest ever, and brings together two companies with nearly 380 years of combined history," Max Mitchell, president and CEO of Crane Co., said in a statement. "Crane Currency is the fastest growing, fully integrated global currency provider in the growing global banknote supply and security industry. Making it part of Crane Co. is a logical extension of our expanding presence in the currency and payment markets. Our combined businesses will be able to offer end-to-end currency and security solutions, from substrate manufacturing and banknote design and printing to micro-optics and banknote validation."
DeFalco said Crane Currency's growth, particularly overseas, has been "tremendous" over the past five years. Last year, it announced $100 million banknote printing facility to be built in Malta that joins its works in Tumba, Sweden, and security technologies operations in New Hampshire and Georgia. Crane Co. will acquire all those operations as well as the headquarters in Boston.
"We're now the fastest growing player in the industry," DeFalco said. "Two-thirds of our revenues come from the international market and half our employees work outside the U.S. so we've really globalized since 10 years ago."
Crane Currency had been looking for a partner that could provide the long-term, stable capital base. Crane Co. had the three key elements — capital, technology and a global profile — that could mesh in a marriage opportunity, he said.
Mitchell said the transaction "meets all of Crane Co.'s strategic and financial criteria for acquisitions." He also acknowledged the Crane family's success and the management team led by DeFalco in transforming Crane Currency into a global leader of banknote design and security.
Crane Co. will purchase 100 percent equity of the division from Crane & Co., private equity firm Lindsay Goldberg, members of the Crane family, and other shareholders, for $800 million on a cash free and debt free basis. The purchase is expected to close in the first quarter of 2018.
While the management team will remain in place, DeFalco, CEO since 2011, will step down and be succeeded by Annemarie C. Watson, current president international currency. He said he's not ready to retire but will figure out what his next adventure will be.
DeFalco compared the currency sale to Crane Co. to when the Technical Materials Division was sold to Neenah Paper four years ago. That brought Neenah to the Berkshires, where it's flourished. Now another Crane company will be introduced to the region.
"It's a happy ending for me ... this is an all good news story," he said. "I think it's particulary good for the community."
Tags: acquisition, Crane & Co., currency,
