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Acquisition of Newell Tools Presentation

Acquisition of Newell Tools Presentation
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Acquisition of Newell Tools Presentation

Product catalog summary
Executive Summary:
Stanley Black & Decker announced the acquisition of Newell Tools, adding renowned brands Irwin® and Lenox® to its portfolio. This acquisition significantly enhances their power tool accessories business and expands their presence in the plumbing and electrical trades. The transaction is valued at $1.95 billion in cash, with Newell Tools having a last twelve months (LTM) revenue of approximately $760 million and LTM EBITDA of $150 million. The acquisition is expected to generate annual cost synergies of $80-$90 million by the third year and offers strong revenue synergy potential.

Acquisition Criteria:
The acquisition aligns with Stanley Black & Decker's strategic growth framework, focusing on strategic fit, organizational capacity, and financial evaluation. The transaction is expected to be accretive to earnings per share (EPS) in the first year, excluding charges, and aims to achieve cash flow return on investment (CFROI) targets.

Financial Framework:
Newell Tools is a global manufacturer of hand tools and power tool accessories, with a strong presence in North America. The acquisition is part of Stanley Black & Decker's growth strategy, focusing on engineered fastening, infrastructure, and tool industry growth areas.

Transaction Details:
The acquisition involves a 100% purchase of Newell Tools, with a mix of stock and asset purchase. The transaction is subject to customary closing conditions and is expected to close in the first half of 2017. The deal includes restructuring and other one-time charges estimated at $125-$140 million, primarily in the first two years.

Synergies and Strategic Rationale:
The acquisition is expected to deliver significant annual cost synergies of $80-$90 million by year three, through footprint consolidation, overhead reductions, and leveraging insourcing opportunities. The strategic rationale includes expanding leadership in the global tools and storage industry and leveraging strong global brand presences.

Conclusion:
This acquisition enhances Stanley Black & Decker's brand portfolio, increases global cross-branding opportunities, and is consistent with their growth framework to strengthen their leadership position in the tools industry. EPS accretion, excluding charges, is expected to be approximately $0.15 per share in the first year and $0.50 per share by the third year.
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Catalog excerpts

Acquisition of Newell Tools Presentation-1

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Acquisition of Newell Tools Presentation-2

Cautionary Statements Stanley Black & Decker makes forward-looking statements in this presentation which represent its expectations or beliefs about future events and financial performance. Forward-looking statements are identifiable by words such as "believe," "anticipate," "expect," "intend," "plan," "will," "may" and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. Forward looking statements made in this presentation, include, but are not limited to, statements...

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Acquisition of Newell Tools Presentation-3

Executive Summary Stanley Black & Decker To Acquire Newell Tools, A Highly Strategic & Synergistic Transaction… • Adds World Class Brands Irwin® & Lenox® To Stanley Black & Decker’s Stellar Brand Portfolio • Significantly Increases Power Tool Accessories Business And Expands Footprint In Plumbing & Electrical Trades • Highly Synergistic Transaction With Identified Annual Cost Synergies Of ~$80 - $90M By Year Three And Strong Revenue Synergy Potential • Purchase Price Of $1.95B In Cash | LTM Revenue Of ~$760M | LTM EBITDA ~$150M …That Aligns With Our Strategic Growt

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Acquisition of Newell Tools Presentation-4

Acquisitive Growth / Financial Framework Active Pipeline For Potential Acquisition Targets... Acquisition Criteria: • Organizational Capacity • Financial Evaluation » 15% + OM | Organic Growth Consistent With Company Targets » Accretive Year 1 Excluding Charges » Achieves CFROI Targets » Value Creation Opportunity > Share Repurchase • One-Time Charges Associated With Acquisitions Will Likely Exceed ~$50M Annual Restructuring Expectation • ~ 50% Of Free Cash Flow Will Be Deployed Toward Acquisitions - Expect A Moderate Pace Going Forward Acquisitive Growth Areas Tool Industry Engineered Fastening...

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Acquisition of Newell Tools Presentation-5

Newell Tools: Overview Company Overview Product & Regional Sales Mix Other HTs 7% • ~$760M Manufacturer Of Hand Tools & Power Tool Accessories • Global Footprint With Majority Of Sales In North America • Diverse & Complementary Product Line • Strong Presence In Electrical & Plumbing Trades Cutting / Circ Saw 12% Primary Brands Highly Attractive Asset – Strong Brands, Complementary Products, New Cha

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Acquisition of Newell Tools Presentation-6

Newell Tools: Brand Summary & Sample Products *Represents Percent Of Consolidated Revenue

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Acquisition of Newell Tools Presentation-7

Acquisition Summary Transaction Details Strategic Rationale Financial Information Deal Structure & Purchase Price • Expand Leadership Position In Global Tools & Storage Industry | Leverage Industry Expertise To Drive Cost & Revenue Synergy Opportunities • 100% Acquisition | Mix Of Stock And Asset Purchase • Strong Global Brand Presences: Irwin® & Lenox® • $1.95B Cash Purchase Price • Complementary Product Lines With Emphasis In Hand Tools & Power Tool Accessories Newell Tools Overview Acquisition Related Charges • ~$125 - $140M Restructuring And Other 1-Time Charges, Primarily Incurred In Years...

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Acquisition of Newell Tools Presentation-8

Synergy Overview Significant Annual Cost Synergies Identified Of ~$80 - $90M… Identified Annual Cost Synergies Functional Efficiencies  Optimizing Teams, Systems & Discretionary Spend  Annual Synergies: ~$50 - $60M Potential Revenue Opportunities Geographic Expansion Industrial Channel  Expand Product Distribution Points Footprint Consolidation & Overhead Reductions  Rationalizing Manufacturing & Distribution Logistics  Leverage Irwin®| Lenox® Mobile Conversion Program Retail Channel  Partner Programs & Portfolio Management  MiUSA Expansion Other Operation Synergies Brand & Product Expansion...

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Acquisition of Newell Tools Presentation-9

Enhances Existing Strong Brand Portfolio With Addition Of Irwin® & Lenox® Brands Increases Global Cross-Branding Opportunities For Tools & Storage Business Acquisition Consistent With Longstanding Growth Framework To Enhance Leadership Position Within Tools Industry EPS Accretion, Ex-Charges, Of ~$0.15 Per Share Expected In Year One And ~$0.50 Per Share In Year Three

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*Prices are pre-tax. They exclude delivery charges and customs duties and do not include additional charges for installation or activation options. Prices are indicative only and may vary by country, with changes to the cost of raw materials and exchange rates.