Spectrum Brands (NYSE:SPB) announced on Tuesday that it will purchase Stanley Black & Decker’s (NYSE:SWK) hardware and home improvement business for $1.4 billion.
News of the deal sent Spectrum Brands shares soaring more than 11% in midday trading on Tuesday, while Stanley Black & Decker shares slid almost 2%.
The deal, which is expected to close in March, allows Stanley Black & Decker to continue its strategy of increasing overseas sales. It will also help finance its $850 million purchase of Infastech, an Asian producer of fasteners. Company officials called the hardware and home improvement division “healthy and profitable,” but “inconsistent” with Stanley Black & Decker’s goals, The New York Times noted.
Spectrum, whose holdings include Rayovac batteries, said the acquired business unit would add between 75 cents and 80 cents to its earnings per share in fiscal 2013.
Advisers for the purchase included Deutsche Bank (NYSE:DB) and Barclays (NYSE:BCS).
The Black & Decker unit, which produces Kwikset locks and Baldwin faucets, generates an adjusted annual profit of $188 million on revenue of $895 million.