Stanley Black & Decker has announced it will sell its attachment and handheld hydraulic tools business—Stanley Infrastructure, LLC—to the Swedish manufacturer of mining and infrastructure equipment, Epiroc AB. The deal is for $760 million in cash.
Founded in 1942, Epiroc is headquartered in Stockholm, Sweden, and has manufacturing facilities in Sweden, the US, Canada, Australia, China, India, Japan, and Germany.
A division of Stanley Black & Decker, Stanley Infrastructure is the world’s largest handheld hydraulic tool manufacturer and a worldwide market leader, offering over 150 handheld hydraulic tools and over 30 mounted impact tools. Brands include Stanley, Paladin, LaBounty, Pengo, and DUBUIS.
“The sale of Infrastructure demonstrates our commitment to maximizing shareholder value through active portfolio management,” explained Donald Allan, Jr., the President and Chief Executive Officer at Stanley Black & Decker.
The Infrastructure business is expected to generate approximately $450-$470 million in revenue with a mid-to-high teens adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin in fiscal year 2023, said the firm.
Stanley Black & Decker explained that it will use the cash proceeds of the transaction, net of modest taxes, to reduce its debt.
“Simplification is a core tenet of our strategic transformation, and this transaction will help further sharpen our focus on value creation opportunities in our core businesses while supporting our capital allocation priorities,” noted Allan.
The company said it expects to incur a pre-tax, non-cash charge of approximately $100 to $150 million related to the write-down of the Infrastructure net assets, which will be excluded from adjusted earnings.
It will be business as usual until the deal is finalized. The completion of the Infrastructure transaction is subject to regulatory approval and other customary closing conditions.
“I am confident that Infrastructure is positioned for a future of innovation and growth with Epiroc and would like to thank all our team members for their valuable contributions over the years,” Allan summed up.