- Crane ( NYSE: CR ) said Monday it divested its unit Redco , which holds all asbestos liabilities and related insurance assets, to Spruce Lake Liability Management Holdco.
- The deal removes all asbestos related liabilities and obligations, related insurance assets and associated deferred tax assets from CR's balance sheet.
- The divestiture will result in estimated one-time after-tax loss of ~$170M, which will be recorded in Q3 and will be excluded from adj. EPS.
- At closing, CR contributed ~$550M in cash to Redco and Spruce Lake contributed $83M.
- CR financed its contribution with short-term debt and cash on hand.
- Spruce Lake will assume Redco's operational management, including administration of all asbestos claims and collection of existing insurance policy reimbursements.
- "... eliminating ongoing payments for asbestos related defense and indemnity costs will increase annual free cash flow," said CR CEO Max Mitchell.
- CR in Apr. announced the divestment of its Canadian distribution business Crane Supply for C$380M .
For further details see:
Crane divests legacy asbestos liabilities