Stanley Black & Decker to make US$440 million fastener acquisition
26 January 2018
Stanley Black & Decker reported 2017 group revenues of US$12.7 billion, an increase of 12% on the previous year. Engineered Fastening organic growth in the fourth quarter was 1%. The company also confirmed a US$440 million (€354 million) fastener acquisition for 2018.
Reporting overall Company performance in 2017, Stanley Black & Decker attributed 7% to organic growth, with 7% coming from acquisitions. Growth was partially offset by the sale of the Group’s Mechanical Security business. Operating margin expanded to a record 14.8%. Diluted adjusted earnings per share increased 14% to US$7.45, “reflecting strong operational performance and accretive acquisitions.
President and CEO, James M.Loree commented: "Stanley Black & Decker
delivered an impressive 2017, with strong execution aligned with our SFS 2.0 operating system. Our team delivered total growth of 12% with well above-market organic growth of 7%, 40 basis points of operating margin expansion, 14% earnings per share growth and solid free cash flow conversion. We achieved these excellent results while successfully integrating multiple acquisitions on or ahead of plan. We are particularly excited about the growth pipeline for 2018 and beyond which includes core innovation, the Craftsman brand rollout, Lenox and Irwin revenue synergies, FlexVolt, emerging markets and additional acquisitions such as Nelson Fastener Systems.
"We are expecting 2018 to be another strong year as our continued focus on SFS 2.0 and our solid growth pipeline position us to deliver sustained above-market organic growth with margin expansion. The team is energized by our company's purpose – 'For Those Who Make The World™' – to achieve our 22/22 vision and to strive to become known as one of the world's leading innovators, to deliver top-quartile financial performance and to demonstrate our commitment to social responsibility."
Engineered Fastening, part of Stanley Black & Decker’s Industrial segment, reported organic growth at 1% in the fourth quarter 2017. The company said that automotive fastener penetration gains and strong volume growth in general industrial markets was more than offset by lower shipments of self piercing rivets to automotive and lower volumes in the electronics market.
Stanley Black & Decker confirmed it had agreed to buy the industrial business of Nelson Fastener Systems, excluding Nelson's automotive stud welding business, for approximately US$440 million in cash. The transaction is expected to close at the end of Quarter 1 2018. Nelson is headquartered in California and is a global distributor of fastening systems, currently a subsidiary of the Doncasters Group, which noted: “The sale is part of Doncasters’ efforts to drive growth in its business by focusing on its core specialised markets: Aerospace, Industrial Gas Turbine and Specialty Automotive. This transaction will enable Doncasters to pay down some existing debt as well as provide necessary capital to further invest in these markets and accelerate growth.”
