7/18/2012 2:51:00 PM
NEWS BRIEFS
Stanley Black & Decker May Double Down on Fasteners
Stanley Black and Decker announced that it is currently evaluating the purchase of a “strategically attractive engineered fastening franchise with revenues totaling approximately $500 million.”
“This highly synergistic asset has favorable growth characteristics with a strong concentration in emerging markets; however, management only intends to proceed with the transaction if it can be obtained for a reasonable multiple that would imply a strong and rapid accretion profile while meeting the company’s stringent return thresholds.”
The news comes amid reports that Stanley Black & Decker is a potential bidder for Infastech Ltd., a Singapore-based industrial fastener manufacturer with revenues of more than $500 million.
The deal is estimated to be worth more than $750 million, according to Reuters.
But company COO James Loree made clear that the fastener deal, if completed, would be the last acquisition Stanley Black and Decker would make for some time, saying the company “plans to curtail any other major bolt-on acquisition activity for a period of at least 12 to 18 months while it completes its ongoing integrations and turns its attention to ramping up organic growth.”
Its growth focus would center on emerging markets (power tools, hand tools and commercial hardware); offshore oil and gas pipeline services; “smart” RFID/RTLS enabled tools and storage; leveraging its newly acquired AeroScout RTLS capability into the electronic security market, “including a major thrust” into the acute care facility vertical; and continuing to pursue revenue synergies associated with the Black & Decker merger.
“These organic growth initiatives have the potential to boost the company’s organic growth rate by two to three points annually in the coming years,” Loree stated.
In June Stanley Black & Decker’s Commercial Do-It-Yourself North American division completed its acquisition of Brewster, NY-based Powers Fasteners for an undisclosed sum.
In the second quarter of 2012 revenue from Stanley Black & Decker’s Industrial segment, including the company’s Engineered Fastening business, grew 1.4% to $634.7 million as “strength in the Engineered Fastening business more than offset European weakness within Industrial & Automotive Repair (IAR) and a weak North American onshore pipeline market.”
Segment profit dropped 2% to $94.9 million.
Industrial segment revenue during the first six months of 2012 rose 5.7% to $1.3 billion, with profit gaining 8.4% to $219 million.
Overall net sales increased 8% to $2.8 billion in Q2, attributable to price (+1%), volume (+1%) and acquisitions (+10%), which were partially offset by currency (-4%). ©2012 GlobalFastenerNews.com
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