Stanley Black & Decker, continuing its move toward global sales and higher-growth businesses, said Tuesday it agreed to sell its Hardware & Home Improvement business to Wisconsin-based Spectrum Brands Holdings Inc. for $1.4 billion in cash.
The deal includes the historic Stanley residential hardware business, which had a factory in New Britain making hinges, latches and related items until 2001, when the last of that work moved to China. Also included in the deal are such brands as Pfister, Baldwin, Kwikset, Weiser and National.
In all, the business had 2011 sales of $940 million, in residential locksets, residential builder’s hardware and plumbing fixtures. That was 8.6 percent of total company sales. Stanley does not break out profits for the business, which is mostly part of its security segment, but the company said HHI, as it’s known, is healthy.
The strategy behind the sale is clear from the company’s intended use of some of the proceeds: to pay for the previously announced $850 million purchase of Hong Kong-based Infastech, a maker of engineered fastening systems, expected to close this year. That business will combine with Shelton-based Emhart Teknologies to form a global powerhouse in an industrial product line that’s heavy on research and development.
Stanley had said on July 18 that it would sell the HHI business, which has 90 percent of its sales in the United States and is mostly a legacy of the former Black & Decker Corp. Five days later it announced the acquisition of Infastech.
Under CEO John F. Lundgren, Stanley has been an aggressive buyer of dozens of companies, not just Black & Decker, which was by far the largest deal. In July, Stanley said it would take an 18-month break from acquisitions to digest some of its purchases, though it’s hard to imagine Lundgren and COO James Loree passing up a good deal, and the company has a strong balance sheet.
The HHI sale, expected to close in the first quarter of 2013, would not affect per-share earnings, Stanley said, when combined with the Infastech deal and share repurchases.
“The sale of HHI is consistent with our strategy of strengthening our position as a diversified industrial company while maintaining the significant upside potential of a housing market recovery through our $5 billion CDIY portfolio,” Lundgren said, referring to the construction and do-it-yourself segment.
Spectrum is a holding company with many consumer brands, including Rayovac batteries, Remington shavers, Cutter insect repellent, the George Foreman grill and Black & Decker small appliances.