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Crane to buy MEI Conlux for $820 million

STAMFORD, Conn. (AP) -- Crane Co. shares rose Friday on the U.S. manufacturer's plans to buy MEI Conlux Holdings and its Japanese affiliate for about $820 million from private equity firms Bain Capital and Advantage Partners.

Crane is a diversified manufacturer of industrial products across a wide range of businesses — including automated payment systems, which is MEI's focus. Crane has made three acquisitions since 2006 to build its payment solutions business, which has annual sales of about $175 million.

Citi analysts Matthew W. McConnell and Deane M. Dray said the deal brings MEI's strength in bill validation to complement Crane's strength in coin handling, and they reiterated a "Buy" rating on its shares.

Crane announced the deal late Thursday and said it expects MEI will add 25 cents per share to earnings in the first year, excluding one-time costs.

MEI, based in Malvern, Pa., generated revenue of about $400 million this year. Its serves customers in the transportation, gambling, retail, vending and other markets in more than 100 countries. It has 820 employees worldwide.

Crane also said it expects 2012 earnings per share will be in the lower half of its prior guidance of $3.75 to $3.85 per share on an adjusted basis. Analysts polled by FactSet expected Crane to earn $3.78 per share for the year.

The company sees earnings between $4.05 and $4.20 per share for 2013, not including the acquisition of MEI. Analysts forecast earnings of $4.17 per share.

Crane shares rose $1.30, or nearly 2.9 percent, to $46.26 in midday trading.