The Product Guy

Nov 3 2009 9:10AM | Permalink | Email this | Comments (0) |
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By Nick Bajzek

Big news this morning in the power tool/hardware/equipment world: manufacturers The Stanley Works and The Black & Decker Corporation announced earlier this morning that they have entered into a merger agreement to create Stanley Black & Decker. The value of the all-stock transaction is valued at approximately $4.5 billion.

According to a press release issued by the combined company, the Black & Decker shareholders will receive a fixed ratio of 1.275 shares of Stanley common stock for each share of Black & Decker common stock they own. 

Update: “A lot of the value of this transaction is in the brands,” says Roger A. Young, Vice President, Investor and Media Relations. “Each are very strong in their respective markets and we’re not out to change that,” he says, adding, “We will focus on four key points: innovation, end users, brands and distribution relationships.”

This represents an implied premium of 22.1 percent to Black & Decker's share price as of Friday, October 30, 2009. The companies say that upon closing, which is expected in the first half of 2010, Stanley shareholders will own approximately 50.5 percent of the equity of the combined company and Black & Decker shareholders will hold 49.5 percent. Click on the link above for the full financial details. 

In the meantime, I’ll be talking with Tim Perra, Director of Global Communications and Roger A. Young, Vice President, Investor & Media Relations, shortly (details on that to follow shortly thereafter). I’ll also be listening in on an audio replay of the company’s conference call to investors, which will be made available in a few hours.

James M. Loree, Executive Vice President and Chief Operating Officer of Stanley, who will keep his titles in the combined company, commented in the news this morning, "This transaction is a significant step in advancing each priority in the strategic framework Stanley has embraced since 2004. It builds strength in all of our business platforms, furthering our goal to maintain portfolio transition momentum, and greatly enhances our resources to continue to invest in high- growth areas…Planning for the integration of these two companies is well underway and we expect to expeditiously realize the full value of cost synergies we have identified as a result of this landmark transaction."

As far as top brass goes, John F. Lundgren, Chairman and Chief Executive Officer of Stanley, will be President and Chief Executive Officer of the combined company. Nolan D. Archibald, Chairman, President, and Chief Executive Officer of Black & Decker, who has been CEO for 24 years, will be Executive Chairman of the combined company for three years. The nine members of the current Stanley Board of Directors will be joined by six new members from Black & Decker's Board of Directors.

The combined company will retain a presence in both Connecticut and Maryland, with its corporate headquarters in New Britain and the Power Tools headquarters remaining in Towson.

The Stanley Works brands include names such as Stanley, FatMax, Bostitch, Facom, Proto, Mac Tools, Sonitrol, Stanley Security Solutions, Best, and Vidmar. The Black & Decker group includes, DeWalt, Porter-Cable, Kwikset and several others.