Stanley Black & Decker to buy Newell Brands' tool business for $1.95 bn
12 October 2016
US power tools maker Stanley Black & Decker Inc today struck a deal to buy Newell Brands Inc's tool business for $1.95 billion in cash.
Stanley Black & Decker will fund the acquisition with a combination of cash and debt.
The acquisition is expected to be approximately $0.15 accretive to earnings per share in year one post-closing, excluding approximately $125 to $140 million of restructuring and other deal related costs and approximately $40 million of non-cash inventory step-up charges.
Stanley Black & Decker expects the transaction to generate annual cost synergies of around $80 - $90 million by year three.
Newell Tools has a wide range of brands and products that are highly complementary to Stanley Black & Decker. The deal includes the highly attractive industrial cutting, hand tool and power tool accessory brands Irwin and Lenox.
Newell Tools operates a global manufacturing footprint, has a strong distribution network, employs more than 2,500 people worldwide and generates annual sales of $760 million.
For Newell, the sale is part of its plan to streamline its portfolio after its April $15 billion acquisition of Jarden Corp. (See: US consumer goods major Newell Rubbermaid acquires rival Jarden for $15 bn)
The company plans to reduce its 32 business units to 16 operating divisions and divest about 10 per cent of its products, including the Voelkl and K2 winter sports brands, the heaters, humidifiers and fans business and the Rubbermaid consumer storage operations.
''Michael Polk, Newell Brands CEO, said, ''The actions we are taking will strengthen the underlying performance of the company and help unlock the unique opportunity for transformative value creation connected to the combination of Newell Rubbermaid and Jarden Corporation. While our Tools brands have been very good contributors to our results, we believe they will benefit from being part of Stanley Black & Decker, a global leader in the tools category."
Stanley Black & Decker's president and CEO, James Loree, said, "Newell Tools is an important step in our quest to further strengthen our presence in the global tools industry. The addition of the iconic Lenox® brand and very strong Irwin® brand, as well as their associated power tool accessory and hand tool products, opens up exciting new sources of global growth in similar ways, albeit on a smaller scale, to what Black + Decker did in recent years.''