Crane Co. CR, on May 24, announced that it has entered into a deal with Grupo Verzatec S.A. de C.V., for the divestment of its Engineered Materials segment. The completion of the deal, which is valued at $360 million (on a cash-free and debt-free basis), is subject to certain regulatory conditions.

Concurrently, the company renamed its Fluid Handling segment as Process Flow Technologies. Also, it provided growth outlook for its Aerospace & Electronics segment.

Notably, the company’s shares gained 2% yesterday to eventually close the trading session at $96.18.

Inside the Headlines

Crane’s Engineered Materials segment is engaged in producing fiberglass-reinforced plastic panels. These products are mainly used in truck trailer and recreational vehicle markets, industrial markets, and the commercial construction industry.

The divestment is in sync with Crane’s strategy of restructuring its business portfolio. This will likely enable the company to better focus on and efficiently direct resources to its core businesses, thus offering value to its shareholders.

Based on consistent strength across its businesses, the company has maintained its earlier outlook for adjusted earnings for 2021 at $5.65-$5.85. The outlook excludes about 44 cents of projected earnings contribution from the Engineered Materials segment (earlier guided on May 3, 2021). Notably, the company will represent the Engineered Materials segment as its discontinued operations effective from second-quarter 2021.

With regard to the renaming of the Fluid Handling segment, the company believes that this will allow better representation of primary strengths and core competencies of its business and further align the segment with its growth strategy.

Its Process Flow Technologies segment manufactures and services valves for industrial usage as well as makes pumps and water treatment equipment for a variety of applications.

Crane noted it is well poised to benefit from its growth initiatives, investment in technology and product development, apart from its focus on productivity measures. Also, expected solid recovery in end markets and acquisitions are likely to be beneficial, going forward. As the company recovers from the coronavirus outbreak-led market downturn, it believes to be at the inflection point for boosting growth. The company remains optimistic about the growth opportunities, particularly at the Aerospace & Electronics segment and issued growth outlook for the same. It expects Aerospace & Electronics segment to generate core sales growth of 7-9% (CAGR) from 2021 through 2030.