Stanley Black & Decker Acquiring Tools Business Of Newell Brands

One week after Newell Brands announced it was selling off 10 percent of its business, Stanley Black & Decker announced Wednesday it is buying those divested brands for $1.95 billion.

Stanley Black & Decker is acquiring the tools business of Newell Brands, which includes the industrial cutting, hand tool and power tool accessory brands Irwin, Lenox and Hilmor brands for $1.95 billion.

Newell Brands had said last week that it was sellling off the brands as part of several changes and divestitures related to the company’s new corporate strategy. Those businesses include its two winter sports units, Völkl and K2 within the Outdoor Solutions segment, its Heaters, Humidifiers and Fans business within the Consumer Solutions segment and the Rubbermaid Consumer Storage business within the Home Solutions segment. Newell Brands will retain its Dymo Industrial labeling business within the reported tools segment

“Newell Brands’ new strategic plan establishes a sharp set of portfolio choices and investment priorities that will focus resources on the businesses with the greatest potential for growth,” said Michael Polk, Newell Brands CEO. “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.”

Last December Newell Rubbermaid and the Jarden Corp. announced that it would merge in a $15 billion deal, which was finalized six months ago. The name of the new company was changed to Newell Brands.

That deal created create a consumer products giant with about $16 billion in annual revenue and brands ranging from Sharpie pens and Graco baby strollers to Sunbeam appliances and Rawlings baseball gloves.

Stanley Black & Decker said that Newell Tools is well-positioned to enhance the offerings and broaden the reach of its global tools and storage business. Newell Tools, a global manufacturing company, has strong distribution relationships and has more than 2,500 employees around the world.

Net sales for the divested business were approximately $760 million for the last 12 months.

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 transaction, which is subject to customary closing conditions, including regulatory approvals, is expected to close in the first half of 2017.

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