Crane Holdings Co., a Stamford-headquartered diversified manufacturer of highly engineered industrial products, has divested Redco Corp., a wholly owned subsidiary that holds liabilities including asbestos liabilities and related insurance assets. Crane divested its subsidiary to Spruce Lake Liability Management Holdco LLC, a long-term liability management company specializing in the acquisition and management of legacy corporate liabilities.
According to Crane, the transaction indemnifies the company for all legacy asbestos liabilities. At closing, Crane contributed approximately $550 million in cash to Redco and Spruce Lake made a capital contribution of $83 million. Crane financed its contribution with a combination of short-term debt and cash on hand.
“Today”™s announcement provides finality and certainty to investors regarding asbestos obligations, and it removes the distraction of asbestos related risks,” said Max Mitchell, Crane”™s president and CEO. “Further, eliminating ongoing payments for asbestos related defense and indemnity costs will increase annual free cash flow available for us to invest in our business, both organically and inorganically. The transaction will also give us substantially more flexibility to optimize the capital structures for post-separation Crane Co. and Crane NXT in a manner that positions both companies for growth and value creation.”
