Tool maker Stanley Black & Decker (SWK) - Get Stanley Black & Decker, Inc. Report agreed to buy the remaining 80% of MTD Holdings that it already doesn't own for $1.6 billion in cash after purchasing a 20% stake in 2019.
At last check shares of SWK, the New Britain, Conn., tool-making giant, were 2.4% lower at $195.70.
MTD Holdings, employing 7,500, is the closely held Valley City, Ohio, maker of Cub Cadet and Troy-Bilt lawn tractors and power tools.
The companies expect the deal to close this year, pending regulatory clearances.
"We have worked directly with MTD over the last three years and have been impressed" with its management, staff and "dedication to innovation in the outdoor space," Stanley Black & Decker Chief Executive James Loree said in a statement.
The company expects the acquisition to add 50 cents a share to its 2022 earnings and more than $1 a share by year four of the deal.
And Stanley Black & Decker expects the transaction to generate annual cost synergies of $100 million by 2025.
MTD generated more than $2.5 billion of revenue over the past 12 months. The company expects revenue of about $2.6 billion in 2022.
The companies say they have a "compelling pathway" to introduce new products for professional and residential outdoor equipment customers.
Stanley Black & Decker and MTD have "strong brands and growth opportunities that align with two market trends driving our business – the consumer reconnection with the home and garden and electrification," Loree said.