Stanley Works to Acquire Black & Decker
Two leading tool and equipment makers, Stanley Works and Black & Decker, said Monday afternoon that they had agreed to merge in an all-stock transaction that they valued at about $4.5 billion.
The combination would bring together two companies whose product lines appear to be complementary. Stanley is a diversified industrial company that sells hand tools and construction equipment, while Black & Decker is known for its power tools.
“Stanley and Black & Decker together will have a comprehensive offering across all major tool categories and greater resources to support continued expansion of our combined security and industrial businesses,” John F. Lundgren, Stanley’s chairman and chief executive, said in a statement.
Nolan D. Archibald, Black & Decker’s chairman and chief executive, said the deal would result in $350 million in cost savings.
Under the terms of the transaction, which has been approved by the boards of both companies, Stanley would buy Black & Decker for stock valued at about $3.5 billion and assume about $1 billion in debt.
Shareholders of Black & Decker would receive 1.275 common shares of Stanley for each Black & Decker share they currently own. The companies said this price represented a premium of 22.1 percent over Black & Decker’s closing stock price on Friday, although that premium narrowed slightly to 21.6 percent by the end of Monday’s regular trading.
The deal was announced after the stock market closed Monday. Black & Decker’s shares ended at $47.34, up 12 cents, while Stanley’s shares closed at $45.15, down 8 cents.
Wall Street seemed to like the deal, as Black & Decker’s stock jumped more than 20 percent, to $57.10, in after-hours trading on Monday, while Stanley’s shares rose 4 percent, to $47. The gain in Stanley’s stock raised the implied price for Black & Decker’s shares to $59.93, from $57.57 at the close of regular trading.
The deal is expected to close in the first half of 2010, and Stanley shareholders would own about 50.5 percent of the the combined company, while Black & Decker shareholders would own about 49.5 percent.
Once the deal is closed, Mr. Lundgren would become president and chief executive of the combined company. Mr. Archibald would become the executive chairman for three years.
The nine members of Stanley’s board would be joined by six members from Black & Decker’s board, the companies said.
The transaction is subject to customary regulatory approvals and closing conditions and requires the approval of Stanley and Black & Decker shareholders.
Deutsche Bank and Goldman Sachs acted as Stanley’s financial advisers and Cravath, Swaine & Moore and Venable acted as Stanley’s legal counsel. Black & Decker’s financial adviser was J.P. Morgan Securities and its legal advisers were Hogan & Hartson and Miles & Stockbridge.
2 comments:
Maybe Stanley can do something with Black and Decker-- the stuff B&D makes right now is absolute crap. I won't buy any more of it.
Anon 9:13 I agree!!
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