Stanley to Sell Door-Locks Unit to Dormakaba for $725 Millionby
Dormakaba to acquire BEST Access, phi Precision and GMT brands
Stanley to use funds to pursue other growth opportunities
Stanley Black & Decker Inc. agreed to sell the majority of its mechanical-security business to Switzerland’s Dormakaba Holding AG for $725 million in cash as the toolmaker seeks to raise money for more possible deals.
The business, which includes the BEST Access, phi Precision and GMT brands of commercial door locks and door hardware, is a better fit in Dormakaba’s portfolio, Stanley Chief Executive Officer James Loree said in a statement Wednesday. The acquisition will add to Dormakaba’s earnings per share from day one, the Ruemlang, Switzerland-based company said in a separate statement.
The sale “will allow us to deploy capital in a more accretive and growth-oriented manner," Loree said in the statement. The company decided not to sell its commercial electronic security and automatic doors business, New Britain, Connecticut-based Stanley said.
Loree is refocusing Stanley on growth opportunities in the tool industry after ending a self-imposed deal-making hiatus with the $1.95 billion acquisition of Newell Brands Inc.’s tools business in October. Dormakaba said the acquisition will provide it with the scale to be one of the top three security firms in North America.
Shares of Dormakaba, a maker of door hardware locks under the Dorma and Kaba brands, rose 4 percent to 735.50 Swiss francs at 9:25 a.m. in Zurich, giving the company a market value of 3 billion francs ($3 billion).
In the last 12 months Stanley’s security businesses generated revenue of $270 million and earnings before interest, tax, depreciation and amortization of $52 million.
Stanley, which was formed from the 2010 merger between Stanley Works and Black & Decker, also announced it plans to retain its commercial electronic security and automatic doors businesses for the long term.
The company expects the sale to close in the first quarter of 2017 and estimates it will dilute 2017 earnings per share by 20 cents.