Crane Currency operations to remain in Dalton after sale
DALTON — Crane Currency is being sold to a company from Connecticut, but an official said the transaction will not affect the company's presence in Berkshire County, which dates back to the firm's founding in 1801.
The buyer, Crane Co., is a publicly traded company, with shares traded on the New York Stock Exchange. Crane Currency is a privately held company that the Crane family has been involved with since its inception.
The new ownership group intends to keep the company's currency manufacturing operations in Pittsfield and Dalton, while investing in the cutting edge technology that has recently made Crane a pioneer in micro-optic security technology and a fully integrated supplier of secure, highly engineered bank notes for central banks worldwide.
A day after the pending transaction was announced, Crane Currency CEO Steven P. DeFalco said the firm will "absolutely" keep its currency manufacturing operations in Berkshire County, and expects to keep adding employees here.
"We make a very unique product for the U.S. government," said DeFalco of Crane, which has been supplying currency paper to the U.S. government since 1879, and been its sole supplier since 1964. "We're the only facility in the world that can make that commitment. We have a longterm commitment to the facility and the employees here."
Crane Co. of Stamford, Conn., a diversified manufacturer of highly engineered industrial products, announced late Tuesday that it had signed an agreement to purchase Crane Currency for $800 million from the private equity firm Lindsay Goldberg of New York City, and the Crane family, who own the company jointly.
The transaction is contingent upon regulatory approvals and customary closing conditions, and is expected to close early in the first quarter of 2018, with Jan. 10 the target date, according to Crane Co.'s filing with the Securites and Exchange Commission.
Regarding employment levels associated with the pending sale, DeFalco said Crane Currency recently added 60 new employees to its Berkshire County workforce, which numbers around 350 workers.
"I think it will be business as usual," DeFalco said. "We'll continue to hire both to support our growth and retirement the same way we would have yesterday. What we do is fairly predictable and stable in Dalton."
Crane Currency has 1,100 employees worldwide, sales in 50 countries, and a plant in Sweden, in addition to other domestic operations in Georgia and New Hampshire. Crane is currently building a second plant for its international operations on the island of Malta. The company's projected sales for 2017 are $500 million.
The only significant change announced Wednesday will occur at the top of Crane Currency. Annemarie Watson, who heads Crane Currency's international division, will be promoted to company president, replacing DeFalco who is stepping down. The change in leadership is part of a previously approved succession plan that will take place after the transaction is completed, DeFalco said.
Although the two companies share the same name, and were both established by men named Crane in the 19th century, they are "unrelated," DeFalco said. Crane Co.'s payments division has worked with Crane Currency in the past, the Connecticut firm's executives said on a conference call with investors on Wednesday
Originally established as a foundry-based business in Chicago in 1855, Crane Co. has four business segments and 11,000 employees employed at 150 locations in 26 countries. It provides products and solutions to customers in the hydrocarbon processing, petrochemical, chemical, power generation, unattended payment, automated merchandising, aerospace, electronics, transportation and other markets.
The company supplies the technology in ATMs, and automated checkout machines that can determine whether bank notes are real, according to DeFalco. Purchasing Crane Currency is the second largest acquisition in Crane Co.'s 162 year history.
Crane Currency will continue to operate under its current name. It will become part of Crane Co.'s payment and merchandising technology division for "reporting purposes," DeFalco said.
"Essentially, the business will operate independently with its (world) headquarters in Boston and its U.S. products division in Dalton," he said.
During the conference call, Crane Co. executives said they plan to invest investing in Crane Currency's technology, make site improvements at company facilities and "build on its already strong place in the market," executive Louis Pinkham said. They also stressed the deal provides extremely attractive metrics and value creation, highly engineered solutions for a growth market, and great adjacency for the company's existing payment business.
"We plan to accelerate our investment in security products," Pinkham said.
Crane Co. executives provided few specific details about their plans during the conference call, saying that more information would be available on investor day March 1. Crane Co.'s investor relations director Jason Feldman did not return a telephone call seeking comment.
According to Crane family member and former company vice president Douglas Crane, the firm's shareholders, which include over 100 members of the Crane family, sold stock to the Lindsay Goldberg private equity firm in 2008. Lindsay Goldberg helped turn Crane Currency into the company it is today, including the sale of the company's technical materials division to Neenah Paper Co. of Georgia in 2014 and its stationery division to former company employees in 2015. Crane Currency moved its global headquarters from Dalton to Boston in 2012.
"They developed the company but they needed to get out at some point, and we knew it would lead some time down the road to a sale of the company," Douglas Crane said. "They eventually got to the point where they could trigger the sale of the company alone and didn't need anyone's approval. It was generally understood throughout the family that there would be a sale in a couple of years."
A call to Lindsay Goldberg seeking comment was not returned.
Town officials were unaware that Crane Currency was about to be sold, said Dalton Town Manager Kenneth E. Walto.
"We only learned of it late (Tuesday) night," Walto said. "We had no advance notice about it.
"Personally, I'm optimistic," he said. "I'm glad that a company that does manufacturing has bought a manufacturing firm."
He believes that Crane Currency's new owners will leave the currency manufacturing operations in Berkshire County.
"This is my opinion, but paper making is very capital intensive, especially the kind of skilled paper making that Crane does," Walto said. "Capital intensive requires a high level of skill in employees. It's not easily moved. It would be a political problem also moving a 200-year-old company out of a town that's already suffering. As long as the company holds all or part of the (U.S.) currency contract I think it will stay here."
Crane family members were also unaware the transaction was about to take place, Douglas Crane said. On Wednesday, Crane said he was still struggling to absorb what the pending sale of the company meant to him personally.
"I've been wrestling with that all night," he said. "It's such a part of who you are, your identity. I worked there for 30 years. The commitment the company always had towards the community was because it was something that was vital to the community.
"Now, it's going to be different," he said. "But I think what's a really interesting twist on the purchase is Crane Co.'s another family company. I'm confident that they will really seize on the opportunity to integrate Crane into their family business."
Contact Business Editor Tony Dobrowolski at email@example.com, or at 413 496-6224.
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