Stanley Black To Sell Much Of Mechanical Security Unit For $725 Mln Cash

(RTTNews) - Stanley Black & Decker (SWK), a diversified industrial company, announced Wednesday that it has entered into a definitive agreement to sell the majority of its Mechanical Security businesses to dormakaba for $725 million in cash.

The sale includes the commercial hardware brands of BEST Access, phi Precision and GMT, which together represented LTM revenues of approximately $270 million and EBITDA of approximately $52 million.

The transaction is expected to close in the first quarter of 2017, subject to customary closing conditions including required regulatory approvals.

The remaining part of the Mechanical Security businesses, Sargent and Greenleaf, with LTM revenues of approximately $50 million, was not included in the sale.

Further, Stanley Black & Decker announced that it intends to retain for the long-term its commercial electronic security and automatic doors businesses.

The tax-efficient sale transaction is expected to generate net after-tax cash proceeds of approximately $700 million, with capital loss carryforwards offsetting the majority of taxes otherwise due.

The company expects the 2017 earnings per share impact of this transaction, estimated full year dilution of $0.20, to be more than offset by accretion from the recently announced Newell Tools acquisition, newly identified low-interest financing strategies related to such acquisition, and the potential redeployment of excess cash proceeds for opportunistic share repurchases.

These together would result in net earnings accretion of at least $0.05 per share in 2017.

In regards to the timing of the Newell Tools closing, the company said it has received antitrust clearance under the Hart-Scott-Rodino Act in the U.S. and subject to receiving other regulatory approvals outside the U.S., expect to close the transaction during the first quarter of 2017.