Newell Tools is an industry leader with an array of strong brands and products that are highly complementary to Stanley Black & Decker. With LTM revenues of approximately $760 million, and low to mid-single digit average sales growth since 2011, Newell Tools is well-positioned to enhance the offerings and broaden the reach of Stanley Black & Decker’s global tools and storage business. Newell Tools operates a global manufacturing footprint, maintains strong distribution relationships in its served markets, and has more than 2,500 employees around the world.
Stanley Black & Decker’s President and Chief Executive Officer, James M. Loree commented, “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. Thus, the acquisition of Newell Tools, our first major acquisition since 2013, will provide both a source of inorganic growth in year one and an organic boost thereafter. SFS 2.0, our operating system, with its growth enhancing elements of digital excellence, commercial excellence and breakthrough innovation will also be deployed to rev up organic growth. This transaction, with our multi-faceted approach to revenue expansion, is entirely consistent with our strategy of driving above-market growth in a low growth world.”
Stanley Black & Decker expects the transaction to result in annual cost synergies of approximately $80 – $90 million by year three. The purchase price of $1.95 billion represents a LTM EBITDA multiple of approximately 13x (approximately 8x post-synergies). The acquisition is expected to be approximately $0.15 accretive to earnings per share (EPS) in year one post-closing (increasing to approximately $0.50 per share by year three), excluding approximately $125 to $140 million of restructuring and other deal related costs and approximately$40 million of non-cash inventory step-up charges, which in the aggregate will largely be incurred during years one and two. The Company expects to fund the acquisition with a combination of available cash and debt.
The transaction, which is subject to customary closing conditions, including regulatory approvals, is expected to close in the first half of 2017.
The Company hosted a conference call with investors on Wednesday, October 12, 2016 at 11:00 am EDT. A presentation is available at www.stanleyblackanddecker.com. A replay will also be available two hours after the call and can be accessed at (855) 859-2056 or (404) 537-3406 by entering the Conference identification number 96141607. The replay will also be available as a podcast within 24 hours and can be accessed on our website and via iTunes.
Stanley Black & Decker, an S&P 500 company, is a diversified global provider of hand tools, power tools and related accessories, mechanical access solutions and electronic security solutions, healthcare solutions, engineered fastening systems, and more. Learn more at www.stanleyblackanddecker.com.
Newell Tools is a leader in the hand tools and power tool accessories space providing premium high-quality products to the tradesmen and professionals who build and maintain the world’s infrastructure. Learn more at www.newellbrands.com.