Bain Capital LLC agreed to buy Apex Tool Group LLC, the maker of Craftsman hand tools, from Danaher Corp. (DHR) and Cooper Industries Plc for about $1.6 billion in its largest deal so far this year.
Danaher expects the sale to the Boston-based private-equity firm to generate after-tax net proceeds of about $650 million and be completed in the first half of 2013, the two companies said today in a statement. Danaher, based in Washington, and Houston-based Cooper each own 50 percent of Apex.
The acquisition of Apex is the largest this year for Bain, which has participated in announced deals worth $4.7 billion in 2012, according to data compiled by Bloomberg. Apex, based in Sparks, Maryland, describes itself as one of the world’s largest makers of hand and power tools. It has dozens of its own brands, including GearWrench ratchets, and makes some of the tools sold by Sears.
Danaher and Cooper (CBE) join United Technologies Corp. and DuPont Co. in selling major divisions to private-equity buyers this year. Danaher, which generated $16.1 billion in revenue last year, formed Apex with Cooper in 2010 by combining their tool businesses and naming Steve Breitzka, previously the head of the Danaher tool unit, chief executive officer.
Apex had net income of $134 million on sales of $1.46 billion last year, according to a Cooper regulatory filing. Apex employs 7,600 people, according to its website.
Bain emerged as the lead bidder for Apex and was considering a purchase of the unit for $1.5 billion to $1.8 billion, a person with knowledge of the matter said last month, asking not to be identified because the talks were private.
Bain’s second-biggest deal this year was the purchase of a 50 percent stake of Japan’s Jupiter Shop Channel Co., worth more than $1 billion, according to the data.
Bain, which was co-founded in 1984 by Republican presidential candidate Mitt Romney, is raising a $6 billion buyout fund. Bain Capital Fund XI, which follows the firm’s 2008 pool of about $10 billion, aims to gather initial commitments by February, according to an e-mail sent to prospective investors, a copy of which was obtained by Bloomberg News.
Goldman Sachs Group Inc. advised Apex on the sale, according to today’s statement.
Danaher’s products include dental and laboratory equipment, while Cooper makes electrical products and tools. Eaton Corp. (ETN) in May agreed to buy Cooper in an $11.8 billion transaction to expand its power-management business and tap more into a U.S. housing recovery. The deal is scheduled to close by the end of this year.