Rümlang, Switzerland-based dormakaba Holding AG (SWX: DOKA) said it agreed to acquire certain Mechanical Security businesses from New Britain, Conn.-based Stanley Black & Decker (NYSE: SWK) for $725 million in cash.
The deal encompasses Stanley Commercial Hardware spanning mainly across North America, including a production facility in Taiwan, as well as GMT in China. The sale includes the commercial hardware brands of Best Access, phi Precision and GMT, which together represented LTM revenues and EBITDA of approximately $270 million and $52 million, respectively. Sargent and Greenleaf, a safe lock provider that also forms part of Stanley Black & Decker’s Mechanical Security business, is not included in the deal.
dormakaba is a global security group engaged in the provision of access solutions and systems in the security industry – everything related to doors and secure access to buildings and rooms, with a presence in over 130 countries, and more than 150 years of experience.
“This transaction builds on the dormakaba (Dorma and Kaba) merger, which boosted our global market position, and the recently completed Mesker acquisition, which will expand our North America offering to cover all essential door components including manual doors,” said Riet Cadonau, CEO of dormakaba. “Now with this unique strategic opportunity to acquire Stanley Commercial Hardware, we will add substantial scale, becoming a top-three provider in the attractive North American market that can offer the full portfolio of door hardware and access control solutions to our customers.”
“After an extensive evaluation of our Security business, we are sharpening our focus on areas within our portfolio which are strategically attractive,’ said Stanley President and Chief Executive Officer James M. Loree. “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. With this transaction and our decision to retain the electronic security and automatic doors businesses, we have concluded our previously announced Security portfolio assessment.”
Stanley Commercial Hardware employs around 1,000 staff and operates with three main brands, including the “BEST” brand, one of the most recognized and trusted security names in the market. Their broad range of mechanical products and security solutions as well as wireless and cloud-based electronic locks are installed in over 350,000 end-user sites across North America, providing dormakaba with an attractive and stable repeat business, among other benefits.
Stanley Black & Decker, an S&P 500 company, is a diversified global provider of hand tools, power tools and related accessories, mechanical access solutions and electronic security solutions, healthcare solutions, engineered fastening systems, and more.
Subject to customary closing conditions, completion of the transaction is expected in the first quarter of 2017. Full operational integration is expected to take up to three years, starting with the carve-out process of the acquired business from Stanley Black & Decker and integration of the back-end functions into dormakaba. The dormakaba post-merger integration process in North America as well as in Asia is well advanced to allow to follow through with this important strategic acquisition.
China-based GMT, which is also included in the acquisition, employs around 600 staff. It is an established provider of commercial hardware products primarily for the mid- and lower price point markets. GMT is a well-known brand for glass door floor hinges and door hardware in China.