Stanley Black & Decker Inc. agreed to buy Niscayah AB for 7.6 billion kronor ($1.2 billion), outbidding rival Securitas AB to secure expansion in the market for electronic security systems.
Investors will receive 18 kronor a share in cash under the terms of the offer, New Britain, Connecticut-based Stanley said in a statement today. The price is 47 percent higher than the Niscayah’s close prior to the $910 million bid from Securitas, which was based on a share swap.
Stanley Black & Decker targeted the Swedish unit to boost sales of video surveillance and electronic security doors across European markets. The U.S. company has highlighted annual savings of about $80 million through the integration of operations.
“Niscayah is a company we know well and is an ideal fit,” John Lundgren, chief executive officer of Stanley Black & Decker, said in the statement.
The Swedish supplier of electronic security systems jumped as much as 18 percent to 18.5 kronor, and traded at 18.1 kronor at 5:37 p.m. local time, valuing the business at 6.61 billion kronor.
The deal is backed by an independent committee of Niscayah’s board. Shareholders with about 19.5 percent of the Swedish company committed to accept the Stanley Black & Decker offer. The acquisition would be funded with offshore cash, and no additional debt would be required, Stanley Black & Decker said.
Securitas is likely to make a counterbid, Soeren Lontoft Hansen, an analyst with Sydbank A/S in Aabenraa, Denmark, said by telephone.
Securitas is reviewing the situation and will then decide whether to continue to pursue its bid or not, Gisela Lindstrand, a spokeswoman, said by telephone.
“There’d be a lot of synergies there, so I would expect a new bid,” said Hansen, who has an “underweight” rating on Securitas’ shares. “Niscayah is very good at IT security systems that Securitas is dependent on, and Securitas is Niscayah’s largest customer.”
Securitas spun off three of its divisions between 2006 and 2008, including Niscayah. The unit, then called Securitas Systems, was distributed to shareholders in 2006 “to enhance transparency, specialization and shareholder value,” Stockholm-based Securitas said on May 16 when it announced its bid.
Securitas said when outlining its offer that it aims for cost savings of about 200 million kronor a year, with the full effect from 2013.
Securitas climbed 1.1 kronor, or 1.8 percent, to 62 kronor at 5:29 p.m. local time in Stockholm.
Stanley Black & Decker, most known for its power tools, already offers electronic security services in Europe. In March 2010, it bought ADT France, an acquisition that was an “indication” of its “continuing strategic intent to expand the security segment internationally,” the U.S. company wrote in its annual report.
Revenue at Stanley Black & Decker’s existing security-systems business advanced 8 percent in the first quarter. The company’s shares climbed 52 cents to $69.80 at 12:49 p.m. in New York Stock Exchange composite trading.
Barclays Capital and J.P. Morgan are Stanley Black & Decker’s financial advisers, while Cleary Gottlieb Steen & Hamilton LLP and Gernandt & Danielsson Advokatbyra KB are acting as legal advisers.