WALTHAM, Mass., Oct. 15, 2024 (GLOBE NEWSWIRE) — Crane NXT, Co. (NYSE: CXT) (“Crane NXT” or the “Company”), a premier industrial technology company, today announced it has signed a definitive agreement with De La Rue plc to acquire its authentication business for 300 million British pounds in cash, subject to customary adjustments.
De La Rue Authentication Solutions is a global leader in security and authentication technologies. The acquisition complements the authentication and online brand protection solutions of OpSec and expands Crane NXT’s portfolio to include security technologies for the identification documents and credentials market.
Aaron W. Saak, Crane NXT’s President and Chief Executive Officer, stated: “The acquisition of De La Rue Authentication Solutions accelerates our strategy as a market leader in providing trusted technology solutions that secure, detect and authenticate our customers’ most valuable assets. Protection from counterfeiting and illicit trade is a priority for governments and leading commercial product brands. This acquisition expands our technology capabilities and will drive profitable growth in new markets.”
Clive Whiley, Chairman of De La Rue, stated “We are delighted to reach agreement with a company with the stature of Crane NXT, with its complementary strengths, and are confident that the Authentication Division will continue to build on the considerable successes that it has achieved over the last ten years.”
De La Rue Authentication Solutions is a leading global provider of digital and physical security and authentication technologies to governments and brands, delivering more than 30-years of industry-leading authentication solutions in nearly 80 countries. Their advanced security features include surface-relief micro-structures and holographic technologies. The company also offers advanced solutions that track and authenticate unique items across global supply chains, complementing Crane NXT’s growing authentication business.
Financials and Closing Conditions
This agreement does not include the currency business of De La Rue. The acquisition is expected to close in the first half of 2025, subject to customary closing conditions. De La Rue Authentication generated approximately $130 million in revenue in the fiscal year ended March 30, 2024, with an adjusted EBITDA margin of approximately 20%. Crane NXT expects the acquisition to be accretive to Adjusted EPS in the first full year and to achieve double digit ROIC by year five, driven by the growth outlook of De La Rue Authentication Solutions as well as transaction synergies.
Webcast and Conference Call Details
Crane NXT will host a conference call to discuss the transaction on Tuesday, October 15, 2024, at 9:00 A.M. (Eastern). Interested parties may listen to a live webcast here or by visiting the Events section of the investor relations section of the Company’s website. For those wishing to participate in the Q&A session of the call, please log-in here. An accompanying slide presentation and a replay of the live event will also be available on the Company’s website.
About Crane NXT, Co.
Crane NXT is a premier industrial technology company that provides trusted technology solutions to secure, detect, and authenticate what matters most to its customers. Crane NXT is a pioneer in advanced micro-optics technology for securing physical products, and its sophisticated electronic equipment and associated software leverages proprietary core capabilities with detection and sensing technologies. Crane NXT has approximately 4,500 employees with global sales, research and development, and operations facilities in the United States, the United Kingdom, Mexico, Japan, Germany, Sweden, and Malta. For more information, visit www.cranenxt.com.
Forward-Looking Statements Disclaimer
This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include all statements that are not historical statements of fact and those regarding the Company’s intent, belief, or expectations. Words such as “anticipate(s),” “expect(s),” “intend(s),” “believe(s),” “plan(s),” “may,” “will,” “would,” “could,” “should,” “seek(s),” and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements. These statements are based on management’s current expectations and beliefs and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. The Company assumes no (and disclaims any) obligation to revise or update these statements to reflect future events or circumstances. Although the Company believes that the assumptions underlying the forward-looking statements are reasonable, it can give no assurance that its expectations will be attained. The Company cautions investors not to place undue reliance on any such forward-looking statements.
Risks and uncertainties that could cause actual results to differ materially from the Company’s expectations include, but are not limited to: changes in global economic conditions (including inflationary pressures) and geopolitical risks, including macroeconomic fluctuations; demand for its products, which is variable and subject to factors beyond its control; fluctuation in the prices of, or disruption in its ability to source, components and raw materials, and delays in the distribution of its products; information systems and technology networks failures, breaches in data security, theft of personally identifiable and other information, and non-compliance with its contractual or other legal obligations regarding such information; risks associated with conducting a substantial portion of its business outside the U.S.; loss of personnel or being able to hire and retain additional personnel needed to sustain and grow its business as planned; being unable to identify or complete acquisitions, or to successfully integrate the businesses the Company acquires, or complete dispositions; being unable to successfully develop and introduce new products, which would limit its ability to grow and maintain its competitive position; governmental regulations and failure to comply with those regulations; risks from litigation, claims and investigations, including those related to product liability and warranties, and employee, commercial, intellectual property and environmental matters; risks related to its ability to improve productivity, reduce costs and align manufacturing capacity with customer demand; the ability to protect its intellectual property; significant competition in the Company’s markets; adverse impacts from intangible asset impairment charges; additional tax expenses or exposures; inadequate or ineffective internal controls; and risks related to the separation transaction, including not obtaining the intended tax treatment of the separation transaction, failure of Crane Company to perform under the various transaction agreements and actual or potential conflicts of interest with Crane Company.
Readers should carefully review Crane NXT, Co.’s financial statements and the notes thereto, as well as the section entitled “Risk Factors” in Item 1A of Crane NXT, Co.’s Annual Report on Form 10-K for the year ended December 31, 2023, and the other documents Crane NXT, Co. and its subsidiaries file from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements.
Use of Non-GAAP Financial Information
Crane NXT reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). This press release contains certain non-GAAP financial measures, including Adjusted EPS. These non-GAAP measures are an addition, and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. The Company’s management believes that these non-GAAP measures of financial results (including on a forward-looking or projected basis) provide useful supplemental information to investors about Crane NXT. Adjusted EPS is calculated as Adjusted net income divided by diluted shares. Adjusted net income is calculated as net income excluding intangible asset amortization, restructuring charges, acquisition-related inventory step-up amortization, transaction related expenses, and including the tax effect of these adjustments and other discrete tax items.
Reconciliations of certain forward-looking and projected non-GAAP measures, including Adjusted EPS, to the closest corresponding GAAP measure are not available without unreasonable efforts due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures. Such reconciliation would imply a degree of precision that would be confusing or misleading to investors.
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