New name reflects size and focus of Crane's second-largest company
NEW YORK CITY -- Crane Co. is updating the structure of its growing payments and vending segment, which has been known as Crane Merchandising Systems for more than a decade. Crane Merchandising Systems now encompasses the unit focused on machine manufacturing, cashless and networking services, and vending management systems. Crane's larger payments division, which merges Crane Payment Solutions with MEI Conlux, has been rebranded as Crane Payment Innovations. The company segment under which these two industry leaders operates is now Crane Payment and Merchandising Technologies.
Crane announced the rebranding initiative during its 2014 investors' conference at the Waldorf Astoria in Manhattan on Feb. 27. A new logo for CPI was unveiled, too, signaling the rapid integration of Crane's legacy payment brands and the newly acquired MEI Conlux, which was purchased for a little over $800 million.
The Stamford, CT-based industrial concern has made dozens of acquisitions recently, but MEI Conlux is its prize catch. Crane announced an agreement to acquire MEI on Dec. 12, 2012. The acquisition was completed nearly a year later, on Dec. 11, after two payment products were divested at the request of the European Commission.
In 2013, Crane Co. posted record sales of $2.6 billion. This year, the company is expected to break $3 billion in sales with MEI's full-year contribution. Operating profit is expected increase to $443 million, or 15%. Together, Crane's payments and vending businesses are projected to post sales of $750 million in 2014, making Payment & Merchandising Technologies the company's second-largest platform after Fluid Handling. The other Crane segments are Engineered Materials and Aerospace & Electronics.
The outlook for Crane Payment & Merchandising Technologies is guarded. In 2014, sales in the Merchandising Systems division are expected to hold steady at $180 million. Last year, sales fell to $180 million from $207 million in 2012. The loss is attributed to a reduction in vending machine orders from bottlers. The division's cashless and vending management services, which offer recurring revenue, are expected to make strong gains this year.
Merchandising Technologies is headed by Brad Ellis, who has been its president for more than 10 years. It remains the No. 1 vending machine manufacturer in North America. Crane produces vending machines under the brands National Vendors, Dixie-Narco, Automatic Products, GPL and Stentorfield. The vending segment also includes Streamware, which develops and markets vending management software.
Crane Payment Innovations is anticipating sales growth of 5% in 2014. The expanded division now represents 75% of total sales for Payment & Merchandising Technologies. CPI's 2013 sales (pro forma) were $550 million and are projected to rise to $575 million this year. (Crane's legacy Payment Solutions division posted sales of $290 million in 2013, which included two weeks with MEI in the mix.)
CPI is led by Mike Hayes, who is president, and Kurt Gallo, who is chief operating officer. Hayes was formerly president of MEI and Gallo was president of Crane Payment Solutions. CPI is the No. 1 payment systems manufacturer in the world; its coin and banknote validators and recyclers are used in more than 100 countries. CPI's brands include CashCode, Money Controls, NRI (National Rejectors Inc.) and Telequip, and now MEI. All of these companies were acquired in the last decade; the newly formed payments business had $20 million in sales 10 years ago. In addition to the vending channel (full-line operators and bottlers), CPI supplies equipment to the transportation, gaming, retail self-checkout and financial services sectors.
Hayes noted that CPI is a logical fit for the Crane system of companies, whose strategies are to develop and provide engineered solutions for niche markets. "We make a critical component in equipment used every day," he said.
Crane Co. chief executive Max Mitchell said the new Payment and Merchandising Technologies platform reflects its size and focus on the markets it serves. Mitchell, who succeeded Eric Fast in January, is the 12th chief executive for the 159-year-old company.
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