Crane Co. files latest offer for pump-and-valve firm
STAMFORD — Industrial-products manufacturer Crane Co. renewed its efforts Monday to acquire pumpand-valve maker Circor International, in a deal that would be worth $1.7 billion.
The all-cash offer follows a similar bid that Circor rejected last month. Crane is proposing to buy all of Circor’s outstanding stock at $45 per share — for a 47 percent premium on the May 20 closing price — terms that are attractive for a firm that has underperformed in the past five years, Crane officials said.
“We are commencing this cash-tender offer to provide Circor shareholders a mechanism to show their support for our offer by tendering their shares,” Max Mitchell, Crane’s president and CEO, said in a statement. “We call on Circor shareholders to act now on this opportunity, and we call on the Circor board to honor its fiduciary responsibilities and allow the shareholders it represents to receive the highly attractive premium we are offering.”
In a statement, Circor said its board of directors will “carefully review and evaluate Crane’s tender offer to determine the course of action that it believes is in the best interests of Circor and its shareholders.” Circor shareholders did not need to take any action “at this time,” it added.
Circor’s board turned down Crane’s first offer last month because it “determined that the proposal was highly opportunistic (and) substantially undervalued Circor and its future prospects.”
Crane officials have expressed dissatisfaction with Circor’s response to their overtures.
“Continuing a pattern of disregard for its shareholders, Circor’s only response (to a June 4 letter to Circor’s board) was to issue a vague public statement that it would provide an update ‘soon’ on its financial outlook and supposed business transformation,” Mitchell said.
“We note again that, to date, the company has not provided any substantive response to our proposal or rationale for how it can generate value in any reasonable period of time that is comparable to our all-cash offer today,” he said.
Circor makes valves, instruments and pipeline products for industries that include the oil-and-gas, power generation, aerospace and defense sectors.
In the first quarter of this year, it recorded $270 million in revenues, down 2 percent year over year. In the same period, it incurred a $4.6 million loss.
For Crane, the proposed deal comes about a yearand-a-half after the closing of its $800 million acquisition of Crane Currency, a Boston-based banknote supplier to the U.S. Treasury.
The name shared by the two companies is a coincidence; they did not have a connection before the merger.
Other Crane specialties include fluid handling, engineered materials and aerospace and electronics.
In the first quarter of this year, Crane revenues grew 4 percent, to $832 million. It recorded an $82 million profit.
Crane is headquartered at the First Stamford Place office complex, in the city’s Waterside section.