Stanley Black & Decker invests in outdoor power equipment market
Stanley Black & Decker today announced that it has entered into a definitive agreement to acquire a 20 percent stake in MTD Products Inc. for $234 million in cash.
Under the terms of the agreement, Stanley Black & Decker has the option to acquire the remaining 80 percent of MTD beginning on July 1, 2021.
"This investment in MTD increases our presence in the $20 billion global lawn and garden market in a financially and operationally prudent way. We have always viewed outdoor products as an attractive growth category for us to expand our presence beyond handheld electric products. This transaction gives us the opportunity to do that with a world-class partner. MTD has a first-rate management team, talented employees and a mission, values and commitment to innovation that are very closely aligned with our own, and we are excited to move forward with them," says James M. Loree, Stanley Black & Decker's president and CEO.
"MTD and Stanley Black & Decker are both proven leaders in our respective industries with iconic brands and world class capabilities," says Robert T. Moll, MTD chairman and CEO. "We're both passionate about innovation with complementary businesses. Ultimately, this will give us more resources to bring really exciting products to our consumers."
With 2017 revenues in excess of $2 billion, MTD manufactures and distributes lawn tractors, zero turn mowers, walk behind mowers, snow throwers, trimmers, chain saws, utility vehicles and other outdoor power equipment for residential and professional lawn and garden customers. Founded more than 85 years ago and headquartered in Valley City, Ohio, MTD's brands include Cub Cadet, Troy-Bilt, and Remington, among others. MTD has state-of-the-art manufacturing facilities in North America, Europe and Asia, and a global distribution network.
This partnership significantly enhances Stanley Black & Decker and MTD's existing commercial relationship, which currently includes the manufacture of select outdoor products under the Craftsman brand. Going forward, the two companies will work together to pursue revenue and cost opportunities, improve operational efficiency and introduce new and innovative products for professional and residential outdoor equipment customers, leveraging their respective portfolios of strong brands.
The transaction, which is expected to close in early 2019, is subject to regulatory approvals and customary closing conditions. In connection with the transaction, Stanley Black & Decker will appoint two representatives to MTD's 11-member Board of Directors. Beginning in 2021, should Stanley Black & Decker choose to exercise its right to acquire the remaining 80 percent stake, the companies have agreed to a valuation multiple based on MTD's expected 2018 EBITDA, with a sharing arrangement for any future EBITDA growth.
Stanley Black & Decker, an S&P 500 company, is a diversified global provider of hand tools, power tools and related accessories, electronic security solutions, healthcare solutions, engineered fastening systems, and more. Learn more at www.stanleyblackanddecker.com.
MTD Products Inc is a worldwide leader in outdoor power equipment. The company's engineering expertise and state-of-the-art facilities are known for innovation and award-winning products under brands such as Cub Cadet, Troy-Bilt, Remington, Robomow, Rover, WOLF-Garten, and Yard Machines. MTD has earned a reputation for excellence in quality, customer service and value; and, seeks to passionately create, build and deliver great products and services that consumers all over the world enjoy using to improve and beautify lawns and gardens. To learn more, visit www.mtdproducts.com.
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