Stanley Black & Decker (NYSE: SWK)
- Completes Stanley Black & Decker’s Previously Announced Review Of Strategic Alternatives For HHI;
- After-Tax Cash Proceeds of $1.3 Billion To Be Used For Share Repurchases, Previously Announced Infastech Acquisition and Deleveraging;
- Divestiture Consistent with SWK’s Strategic Objectives
Stanley Black & Decker (NYSE: SWK), an S&P 500 global diversified industrial company, announced today that it has entered into a definitive agreement to sell its Hardware & Home Improvement Group (“HHI”) to Spectrum Brands Holdings, Inc. (NYSE: SPB) (“Spectrum Brands”) for $1.4 billion in cash. The transaction, which is subject to customary closing conditions including required regulatory approvals, is expected to close by the first quarter 2013.
With 2011 revenues of $940 million, HHI is a provider of residential locksets, residential builder’s hardware and plumbing fixtures marketed under the Kwikset, Weiser, Baldwin, Stanley, National and Pfister brands, among others. Other than Pfister, HHI is reported within Stanley Black & Decker’s Security segment. With 90% of HHI’s revenues from North America and more than 50% of its revenue coming through U.S. home centers, the divestiture of HHI is a meaningful step in the continued diversification of Stanley Black & Decker’s revenue streams and geographic footprint.
The tax-efficient transaction is expected to generate after-tax cash proceeds of $1.3 billion. Over fifty percent of the proceeds from this divestiture will be used to repurchase shares and a smaller portion will go towards modest debt reduction, to ensure the company’s leverage ratios remain in its target range. The company will reinvest the remaining proceeds, together with existing offshore capital, to fund the previously announced Infastech acquisition, which will significantly add to the company’s Engineered Fastening growth platform and position in Asian markets. As a result of the impact of the share repurchase program and Infastech acquisition, the company does not expect significant annualized earnings per share dilution from the divestiture. There is no anticipated impact on Stanley Black & Decker’s previously provided 2012 guidance.