STAMFORD, CT -- Crane Co. reports that it has reached an agreement with MEI Conlux Holdings on revised terms for Crane's planned acquisition of MEI.
The revision takes into account the conditions required by the European Commission before it clears the transaction: Crane's divestiture of its Payment Solutions' B2B banknote recycler product line, and its licensing in Europe of Payment Solutions' Currenza C2 coin recycler line. These remedies do not affect MEI's competing bill and coin recycler product lines. | SEE STORY
Under the revised agreement, the purchase price will be approximately $804 million on a cash- and debt-free basis, rather than the previously announced price of $820 million, both subject to customary adjustments as provided in the purchase agreement. Crane also agreed to share in one-third of any refinancing costs incurred by MEI as a result of the delayed closing, up to a maximum of $5 million.
Crane will be responsible for implementing the divestiture and licensing remedies pursuant to the conditions of the European Commission clearance, and will retain any proceeds thereof. Subject to successful execution of the remedies, the acquisition is expected to close in the fourth quarter of 2013.
Crane Co. noted that the U.S. Federal Trade Commission cleared the MEI acquisition without conditions on July 23.
As a result of the agreement with the sellers of MEI, commitments to the EC and a more conservative near-term growth outlook for MEI, Crane is revising its accretion estimate for MEI within the first 12 months of ownership from 25¢ a share to 20¢, which includes 7¢ per share of synergies. Crane reaffirmed its estimate that synergies will total about $25 million pretax, or 30¢ a share, by the third year. The estimates exclude inventory step-up and one-time transaction costs.