Crane Co. Refutes Circor’s Unrealistic Plan; Urges Shareholders to Tender Their Shares and Demand the Circor Board of Directors Engage with Crane Co.

Source Press Release
Company Crane Co.CIRCOR International, Inc. 
Tags Corporate Deals, Deals, Oil Services
Date June 25, 2019

- CIRCOR’s revised, short-term business plan is not credible and fails to show path to standalone value creation in excess of Crane’s offer

Crane Co.’s all-cash offer at $45 per share remains the clear best option and provides certain value at a significant premium for CIRCOR shareholders

Crane Co. (NYSE: CR), a diversified manufacturer of highly engineered industrial products, today filed a detailed response to  CIRCOR International, Inc.’s (NYSE: CIR) (“CIRCOR”) revised business plan. Crane Co.’s analysis underscores its belief that CIRCOR’s claims are highly unrealistic and illustrates why its superior, all-cash offer of $45 per share represents the best option for CIRCOR shareholders.

Max Mitchell, Crane Co. President and Chief Executive Officer commented, “CIRCOR’s short-term plan, while expected, is yet another set of empty promises. This, coupled with CIRCOR’s track record of repeatedly missing its own targets, significant underperformance, and value destruction, make it extremely clear that  Crane Co.’s $45 per share offer represents the superior option, with certain and attractive value.”

He continued, “CIRCOR shareholders have both publicly and privately expressed their frustration with CIRCOR’s ability to drive value for them. We urge them to tender their shares to encourage CIRCOR’s Board to engage with us in good faith negotiation.”

Brief Overview of Crane Co.’s Analysis of CIRCOR’s Latest Strategic Plan

  • CIRCOR’s plan is based on highly unrealistic performance assumptions. CIRCOR’s plan assumes EBITDA growth of 37% by 2020, a level of performance that is unlikely given CIRCOR’s track record.
  • CIRCOR’s aspirational plan should be viewed skeptically given its history of empty promises. CIRCOR has repeatedly failed to achieve its own performance targets, missing all five-year targets set in 2014, including organic revenue growth, adjusted operating margin, adjusted EPS, and Free Cash Flow. Even though CIRCOR’s new 2020 targets are lower than the 2020 targets it set in 2017, weak performance since 2017 suggests it will also likely miss the revised goals.
  • The Time is Now: Crane Co.’s approaches to CIRCOR in 2011 and 2013 were rebuffed under different market conditions, both times with the excuse that CIRCOR’s standalone business prospects were superior. Since that time, CIRCOR has substantially missed its self-set financial objectives. Given current market conditions, CIRCOR’s excessive debt burden makes the new plan seem even more implausible.
  • CIRCOR’s organizational disruption will make any turnaround even more unlikely. CIRCOR has had significant turnover across top management, with three CFOs, nine vice president turnovers, four Energy Segment Heads, and three Aerospace Segment Heads since 2013.

Crane Co. remains confident that the certainty of its fully financed, all-cash offer at a significant premium is the best outcome for CIRCOR shareholders.  Crane Co. urges CIRCOR shareholders to tender their shares into the tender offer.

For more information on Crane Co.’s analysis of CIRCOR’s plan, CIRCOR shareholders should refer to https://www.craneco.com/circor-information.

Any questions or requests for the Offer to Purchase or other materials related to the tender offer may be directed to Innisfree M&A Incorporated, 212-750-5833.

Advisors

Wells Fargo Securities is acting as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP as legal advisor to Crane.

Source: EvaluateEnergy® ©2019 EvaluateEnergy Ltd