Crane Company (NYSE:CR) has reached an agreement to sell its Engineered Materials business to KPS Capital Partners for $227 million. This move is part of Crane's strategy to streamline its operations and concentrate on its two main growth areas: Aerospace & Electronics and Process Flow Technologies. The transaction is expected to close in the first quarter of 2025, following recent acquisitions that have bolstered Crane's core businesses.

The sale will lead to a revision in Crane's 2024 adjusted earnings per share (EPS) guidance, decreasing it from a range of $5.05-$5.20 to $4.71-$4.86. This adjustment reflects the Engineered Materials segment being classified as discontinued operations, which will impact financial reporting and necessitate changes in investor analysis.

Max Mitchell, Crane's CEO, emphasized that this divestiture is a significant step in the company's ongoing efforts to simplify its portfolio. He noted that the company has previously divested non-core assets and has made strategic acquisitions to strengthen its focus on high-margin, technology-driven sectors. The recent acquisitions include Baum Lined Piping, Vian Enterprises, CryoWorks, and Technifab Products.

The anticipated closing of the transaction in Q1 2025 allows time for regulatory approvals and ensures a smooth transition. The Engineered Materials segment will be reported as discontinued operations starting with the fourth quarter of 2024, affecting how past financial results are viewed.

Mitchell expressed pride in the Engineered Materials team and acknowledged the business's strong market position. He conveyed confidence that the segment would continue to thrive under KPS's ownership. Crane Company, founded in 1855, specializes in manufacturing engineered components for critical applications across various industries, employing approximately 7,500 people globally.

In summary, the sale of the Engineered Materials business is a strategic decision aimed at enhancing Crane's focus on its core growth platforms, despite the short-term impact on earnings guidance. The company remains committed to driving sustainable growth through careful portfolio management and strategic investments.