Stanley Black & Decker Buying Infastech

8/6/2012 4:17:00 PM
HEADLINES
Stanley Black & Decker Buying Infastech

Stanley Black & Decker has decided to double-down on fasteners, one of the few industries producing solid results for the corporation.
The company agreed to acquire Hong Kong-based Infastec for $850 million in what is reported to be its last major acquisition for the next 12-18 months.

Stanley Black & Decker is buying the company from CVC Capital Partners and Standard Chartered Private Equity Limited.

The deal was announced days after Stanley Black & Decker reported that its Engineered Fastening division achieved its 10th consecutive quarter of double-digit growth with a strong performance in the second quarter of 2012. 

The combined engineered fastening platform will generate approximately half of its revenues from automotive manufacturing, a third from industrial fastening applications and 20% from high growth verticals such as electronics, the company stated. 

“With the acquisition of Infastech, the engineered fastening platform will be the first of the company’s recently identified new growth platforms to achieve its mid-decade goal of $1 – $2 billion in revenue.”

CEO John Lundgren called the acquisition “an excellent complement to our current Emhart Teknologies engineered fastening business.”

“It adds to our strong positioning in specialty engineered fastening, an industry which has solid growth prospects particularly in the global electronics, industrial and automotive end markets, and will further expand our global footprint with its strong concentration in fast-growing emerging markets.”

“In addition, Infastech’s diverse revenue base, strong margins, and solid financial track record make it a meaningful addition to our portfolio,” Lundgren added. 

With revenues of approximately US$500 million and more than 2,000 employees, Infastech is one of the world’s largest producers of engineered mechanical fasteners and one of the largest Asia-based global players in the specialty mechanical fastener market.

More than half of Infastech’s 2011 revenues were generated in the Asia-Pacific region and once combined with Emhart, Stanley Black & Decker’s engineered fastening platform, the enlarged business will generate close to 40% of its revenues from this high growth region. Total company revenues from the emerging markets will increase to approximately 16%, an important step towards the company’s mid-decade goal of 20%+.

Infastech designs, manufactures and distributes highly-engineered fastening technologies and applications for a blue-chip customer base in the industrial, electronics, automotive, construction and aerospace end markets. 

Infastech’s portfolio, includes Avdel, ELCO and iForm brands, which the company supplies to customers in more than 150 countries worldwide. Web: infastech.com

Stanley Black & Decker expects the transaction to result in annual cost savings of approximately USD$25 million by the third year of ownership. 

The acquisition is also expected to be immediately accretive to Stanley Black & Decker’s earnings per share (EPS), with accretion of USD$0.15 per share in the first year following the closing of the transaction and USD$0.35 per share in the third year following closing, excluding acquisition-related charges of $25 – $30 million which will largely be incurred in the first two years.

The transaction is expected to close in the fourth quarter of 2012. 

Stanley Black & Decker’s Engineered Fastening business, which largely operates under the Emhart brand, grew 13% in 2011 due to new products and increased customer platform penetration.

Emhart Teknologies has more than 2,500 employees in 39 operating facilities worldwide. Principal fastener facilities are located in Danbury, CT; Montpelier, IN; Campbellsville and Hopkinsville, KY; Chesterfield, MI; Birmingham, England; Giessen, Germany; and Toyohashi, Japan. Web: emhart.com ©2012 GlobalFastenerNews.com

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Related Links:

• Stanley Black & Decker