Neenah Paper, Inc. has signed a definitive agreement to purchase all of the outstanding equity of Crane Technical Materials (CTM) from Crane & Co., Inc. for $72 million, comprised of $64 million for the business and $8 million related to future cash tax benefits Neenah will receive as a result of the transaction.
Crane Technical Materials, with annual sales of approximately $50 million and two manufacturing operations in Pittsfield, MA, provides performance-oriented wetlaid nonwovens media for fast growing filtration end markets as well as environmental, energy and industrial uses.
"This acquisition clearly fits our strategy of expanding in profitable, performance-oriented markets with above average growth rates, and provides a U.S. filtration presence that nicely complements our German-based filtration business," says Neenah CEO John O'Donnell. "From a financial standpoint, this investment provides an attractive rate of return, is not dilutive to our mid-teen EBITDA margins and is accretive to earnings. Most importantly, CTM brings new technologies that provide a platform for future growth and increase our ability to be a global supplier of choice for our customers."
The company indicated approximately $2-$3 million of one-time costs are expected in 2014 related to the acquisition. Annual earnings are expected to be approximately $0.20 per share accretive, excluding one-time costs and benefits of lower cash taxes.
The acquisition will be financed primarily through available cash on hand and the transaction is expected to close in early July and is subject to customary closing conditions.
Neenah Paper buys Crane Technical Fabrics