Crane Holdings Divests Redco To Spruce Lake Liability

Crane Holdings, Co. (CR), Monday announced that it has divested Redco Corporation, a wholly owned subsidiary that holds liabilities including asbestos liabilities and related insurance assets to Spruce Lake Liability Management Holdco LLC.

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.

CEO Max Mitchell said, "Today's announcement provides finality and certainty to investors regarding asbestos obligations, and it removes the distraction of asbestos related risks. 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."

Spruce Lake will assume the operational management of Redco, including the administration of all the asbestos claims and collection of existing insurance policy reimbursements.

The divestiture will result in an estimated one-time after-tax loss of approximately $170 million that will be recorded in the third quarter of 2022 which will be excluded from adjusted earnings per share.

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