Crane Co. (NYSE: CR), a diversified manufacturer of highly engineered industrial products, announced today that it has signed an agreement to purchase 100% of the equity interests in MEI Conlux Holdings (U.S.), Inc. and its affiliate MEI Conlux Holdings (Japan), Inc. (together “MEI”) from Bain Capital and Advantage Partners. The purchase price is approximately $820 million on a cash free and debt free basis, representing 9.6 times MEI’s estimated 2012 EBITDA of $85 million. MEI, a leading provider of payment solutions for unattended transaction systems, serves customers in the transportation, gaming, retail, service payment and vending markets. Headquartered in Malvern, PA, and with sales of approximately $400 million in 2012, MEI has customers in over 100 countries and employs 820 people worldwide. From 2009 to 2012, MEI sales have grown at a 13% compound annual growth rate and EBITDA margins have increased to 21%. On a pro forma basis, the combined sales of MEI and Crane Payment Solutions will be approximately $575 million in 2012.
Mr. Eric Fast, President and Chief Executive Officer of Crane Co., said, “This acquisition is consistent with our strategy of niche market leadership. MEI is an outstanding business and a leader in the payment solutions industry, with a solid product portfolio, excellent technology and sophisticated hardware and software. MEI materially strengthens our existing Payment Solutions business, which we have grown through three acquisitions beginning in 2006. Together we will be able to offer our customers a complete product suite utilizing MEI’s leadership in bill validation and Crane’s leadership in coin handling. We will have the global scale to capitalize on key growth opportunities, especially in emerging markets. In addition, we will expand our capabilities to drive innovation and facilitate the integration of bills, coins and cashless payment options to better serve customers worldwide. Excluding inventory step-up and one-time transaction costs, we expect MEI to be accretive to earnings within the first year of acquisition by approximately $.25 per share, including $.05 in synergies. We expect synergies to grow to $25 million annually on a pre-tax basis, or $.30 per share in 2015.”