Stanley Black & Decker agrees to sell mechanical security businesses for $725m
NEW BRITAIN, Conn.—Stanley Black & Decker yesterday announced that it has entered into a definitive agreement to sell the majority of its mechanical security businesses, including commercial hardware brands BEST Access, phi Precision and GMT to access and security solution provider dormakaba for $725 million in cash. The deal is subject to customary regulatory approvals.
dormakaba also recently acquired Mesker Openings Group, a U.S.-based commercial door and hardware company, for $142.5 million. That deal was finalized on Dec. 13. dormakaba has six divisions—including an access solutions market for the Americas, Asia-Pacific, EMEA, and another for Germany, Austria and Switzerland, as well as a Key Systems division and a Movable Walls division.
"The recent acquisition of Mesker’s manual door business and major parts of Stanley Black and Decker’s mechanical security business are missing pieces of the puzzle that establish dormakaba as full-range provider for our industry in North America," dormakaba Group CEO Riet Cadonau told Security Systems News in an email interview. Through these acquistions, "dormakaba strengthens its position in attractive vertical markets such as education and healthcare while expanding the ability to serve the total life cycle of projects and buildings (new construction, installed base for services) in North America," he said.
BEST Access, phi Precision and GMT, together represented LTM revenues and EBITDA of approximately $270 million and $52 million, respectively, according to Stanley's announcement. The transaction is expected to close in the first quarter of 2017, subject to customary closing conditions including required regulatory approvals. Following these acquisitions, Cadonau said that dormakaba expects to increase dormakaba's revenue by about $800 million "in North America with Access Solutions alone, nearly doubling sales from 2015/16."
Through the Stanley acquisition, dormakaba brought on "about 700 employees in the US, about 300 in Taiwan and about 600 in China," Cadonau said, along with three locations in North America—one for manufacturing and two for distribution—and an additional facility in Taiwan."
In dormakaba's acquisition of Mesker's, the company gained 400 employees, five manufacturing and distribution facilities throughout the U.S., and "a complementary product portfolio, which closes some gaps in our portfolio in the North American market such as manual doors and frames, economy hardware and accessories," according to Cadonau.
"After an extensive evaluation of our security business, we are sharpening our focus on areas within our portfolio which are strategically attractive,” Stanley Black and Decker president and CEO James M. Loree said in a prepared statement. “While BEST Access, phi Precision and GMT are healthy and profitable businesses, they are a better fit in dormakaba's portfolio and their divestiture will allow us to deploy capital in a more accretive and growth-oriented manner.”
Not included in the sale with Stanley Black & Decker was its Sargent and Greenleaf brand (LTM revenues of approximately $50 million), the remaining part of Stanley’s Mechanical Security businesses.
Stanley Black & Decker also announced that it intends to retain for the long-term its commercial electronic security (LTM revenues of approximately $1.5 billion) and automatic doors (LTM revenues of approximately $0.3 billion) businesses.