* Deal to add 15 cents/shr to Stanley Black's EPS in first
* Deal to close in first half of 2017
* Newell's tool business had sales of $760 mln
(Adds analyst comment, shares)
Oct 12 Power tool maker Stanley Black & Decker
Inc said it would buy Newell Brands Inc's tool
business for $1.95 billion, adding brands such as Irwin and
Lenox to its lineup.
Newell's shares rose 1.8 percent to $51.25 in morning
trading on Wednesday, while Stanley Black & Decker gained 1.7
percent to $119.74.
Newell, which owns more than 160 brands including Sharpie
markers and Rubbermaid food containers, said last week it would
divest about 10 percent of its business portfolio to streamline
operations following its acquisition of Jarden Corp earlier this
Hoboken, New Jersey-based Newell's tool business had sales
of about $760 million in the past 12 months, the companies said
The deal will bolster Stanley Black & Deckers' tools and
storage business, its biggest. The business includes corded and
cordless electric power tools sold under the Black+Decker brand.
This would be Connecticut-based Stanley Black & Decker's
biggest deal since it was created through the $4 billion
all-stock merger of Stanley Works and Black & Decker Corp in
Stanley Black & Decker said it expected the deal to result
in savings of $80 million-$90 million by the third year after
"Although the purchase price is dilutive prior to synergies,
Stanley has a solid history of meeting or exceeding synergy
targets," Wunderlich Securities analyst Liam Burke wrote in a
The companies expect the deal to close in the first half of
The deal would add about 15 cents per share to Stanley Black
& Decker's earnings in the first year after close, and 50 cents
per share by the third year, excluding about $125 million-$140
million of restructuring and other deal-related costs, the
Stanley Black & Decker said it expects to finance the deal
with a combination of cash and debt.
Newell, which will use the proceeds to reduce debt, said
total 2015 net sales of the remaining businesses held for sale
is about $700 million.
JPMorgan is financial adviser to Newell on the deal.
(Reporting by Ankit Ajmera in Bengaluru; Editing by Sriraj