Newell Rubbermaid to acquire American Saw & Mfg.

Newell Rubbermaid Inc., Freeport, IL, has reached a definitive agreement to acquire American Saw & Mfg. Company, East Long Meadow, MA, a manufacturer of power tool accessories and hand tools marketed under the Lenox brand, for $450 million in cash. The deal is subject to regulatory and other customary approvals and is expected to close by year-end.

With 2001 revenues of $185 million, American Saw was founded in 1915 and employs 800 people worldwide. This transaction represents Newell Rubbermaid's second significant acquisition of a power tool accessories and hand tools business. In April, the company purchased the remaining stake in American Tool Companies.

The transaction is structured as a purchase of assets, which permits the deduction of goodwill for tax purposes. Newell Rubbermaid estimates the present value of the future tax benefit to be $85 million, which effectively reduces the purchase price of the acquisition to approximately $365 million, or 5.9 times 2001 EBITDA. The purchase is expected to contribute $0.04 to Newell Rubbermaid's 2003 earnings per share.

The deal marks a continued expansion and enhancement of the company's product lines and customer base in the global power tool accessories and hand tools market. With 2001 revenues of $185 million and manufacturing and distribution facilities in North America, Europe, South America and Asia, American Saw strengthens the company's platform in the professional and fast growing 'do-it-yourself' channels.

American Saw's product portfolio includes leading Lenox brand power tool accessories and hand tools, including jig saw blades, reciprocating saw blades, hole saws, drill bits, band saw blades, hack saws and blades, and utility knives. Its products are sold through hardware stores, industrial, building and professional supply channels, and many other specialty channels worldwide. Additionally, Lenox products represent a significant growth opportunity for the company at home improvement retailers where Newell Rubbermaid is already a large and important supplier. American Saw was founded in 1915 and employs 800 people worldwide.

This transaction represents Newell Rubbermaid's second significant acquisition of a power tool accessories and hand tools business. In April of this year, the company purchased the remaining stake in American Tool Companies, adding branded power tool accessories such as Irwin and hand tools such as Vise-Grip and Quick-Grip. The transaction added approximately $440 million in annual sales to the company's existing hardware business.

The combination of American Saw, American Tool and the company's BernzOmatic business creates critical sales mass and momentum, and the companies complement one another in the marketplace. American Tool's brand strength in retail channels and American Saw's brand strength in professional channels give the company the opportunity to leverage its product development and sales and marketing efforts at growth accounts. In particular, the company's successful Phoenix in-store marketing force, which consists of highly successful representatives in stores and in direct contact with key accounts and consumers, will be instrumental in maximizing brand and product synergies and driving sales growth.

The acquisition also establishes the company as a leader in the estimated $12 billion global market for power tool accessories and hand tools. Approximately 30% of the combined American Saw, American Tool and BernzOmatic revenues are generated outside the U.S.
'American Saw is an outstanding fit for our company, bringing to us the powerful Lenox brand, attractive margins and great potential for future growth. By uniting the strengths of American Saw with our American Tool business, we are well positioned to take full advantage of the combination's powerful synergies across the consumer, do-it-yourself and professional channels,' said Joseph Galli, Jr., Newell Rubbermaid's CEO.

'Strategically, this acquisition helps position us as a global leader in the power tool accessories and hand tools market which represents a strong long-term growth opportunity for Newell Rubbermaid.'

Galli added that American Saw will become a part of Newell Rubbermaid's Levolor/Hardware Group, which in 2001 accounted for $1.4 billion of the company's nearly $7 billion in sales. In addition to its portfolio of hand tools and power tool accessories, the group manufactures and markets BernzOmatic torches; paint applicators and accessories under the Shur-Line and Rubbermaid brands; cabinet and door hardware under the Amerock and Douglas Kane brands; and window fashions under the Levolor, Kirsch, Gardinia and Swish brands.

The Levolor/Hardware group is led by James J. Roberts, who has extensive experience in the power tool accessories and hand tools businesses. During a 19-year career at Black & Decker Corporation, Roberts served as president of the company's Worldwide Accessories business and earlier was vice president and general manager of Professional Power Tools-Europe. Prior to joining Newell Rubbermaid in 2001, he served as president of Worldwide Hand Tools and Hardware for The Stanley Works.