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Stanley Black & Decker (NYSE: SWK) New Britain, CT, has agreed to sell its Hardware & Home Improvement Group to Spectrum Brands Holdings, Inc. (NYSE: SPB), Madison, WI, for $1.4 billion. The transaction is expected to close by the first quarter 2013.
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With 2011 revenues of $940 million, the HHI Group is a provider of residential locksets, residential builder’s hardware and plumbing fixtures marketed under the Kwikset, Weiser, Baldwin, Stanley, National and Pfister brands, among others. Other than Pfister, HHI is reported within Stanley Black & Decker’s Security segment.
With 90 percent of HHI’s revenues from North America and more than 50 percent of its revenue coming through U.S. home centers, the divestiture of HHI is a step toward continued diversification of Stanley Black & Decker’s revenue streams and geographic footprint.
Over 50 percent of after-tax proceeds will be used to repurchase shares and a smaller portion will go toward modest debt reduction, to ensure the company’s leverage ratios remain in its target range.
The company will reinvest the remaining proceeds, together with existing offshore capital, to fund the previously announced Infastech acquisition, which will significantly add to the company’s Engineered Fastening growth platform and position in Asian markets.
Stanley Black & Decker President and CEO John Lundgren said, “While HHI is a healthy and profitable business, its characteristics are inconsistent with Stanley Black & Decker’s strategic objectives of diversifying our revenue base through further expansion into targeted end markets with higher growth and margin profiles, including emerging markets.”