Stanley Black & Decker to sell STANLEY Infrastructure to Epiroc for $760m
Stanley Black & Decker (NYSE: SWK) has entered into a definitive agreement to sell its STANLEY Infrastructure division, a leading provider of attachment and handheld hydraulic tools, to Epiroc AB (Nasdaq Stockholm: EPIA) for $760 million in cash. This transaction reflects Stanley Black & Decker’s strategic focus on simplifying its operations and maximizing shareholder value.
STANLEY Infrastructure’s Expected Performance and Deal Implications
STANLEY Infrastructure is projected to generate revenues between $450 million to $470 million in FY2023, with a mid-to-high teens adjusted EBITDA margin. Stanley Black & Decker plans to utilize the cash proceeds from this sale, after modest taxes, primarily for debt reduction. The company also expects to incur a pre-tax, non-cash charge of about $100 to $150 million related to the write-down of the Infrastructure net assets.
Epiroc AB’s Strategic Expansion through Acquisition
Swedish firm Epiroc AB, specializing in productivity and sustainability solutions for the mining and construction industries, aims to strengthen its presence in the attachments business, particularly in the United States, with this acquisition. STANLEY Infrastructure, based in Milwaukie, Oregon, is known for its strong brands such as LaBounty, Paladin, Pengo, and Dubuis, and employs approximately 1,380 people, mainly in the United States.
Major Deal in Tools Industry: Epiroc to Acquire STANLEY Infrastructure for Enhanced Market Presence. Photo courtesy of Epiroc AB.
Benefits of the Acquisition for Epiroc AB
Epiroc’s President and CEO, Helena Hedblom, emphasized the acquisition’s alignment with the company’s long-term strategy in the infrastructure and construction industries. The addition of STANLEY Infrastructure’s product portfolio and its extensive indirect sales network is expected to diversify and strengthen Epiroc’s market position. The acquisition, valued at approximately SEK 7.8 billion (MUSD 760), is financed through a secured bridge facility.
Expected Impact and Completion of the Transaction
This acquisition is subject to customary regulatory approvals and is expected to be completed in the first quarter of 2024. It represents a significant step in Epiroc’s growth strategy, offering a more comprehensive product range to meet the increasing demands for versatility and productivity in the infrastructure and construction sectors.