NEW BRITAIN, Conn. (AP) — Tool maker Stanley Black & Decker Inc. is selling its hardware and home-improvement business to Spectrum Brands Holdings Inc. for $1.4 billion in cash.
The hardware and home-improvement unit makes locksets, hardware and faucets for residential use and includes brands such as Pfister, Baldwin and Kwikset.
Spectrum Brands, based in Madison, Wis., said that the acquisition will broaden its product offerings which include the Rayovac, Remington and Toastmaster brands.
Stanley Black & Decker, which is based in New Britain Conn., said the sale is part of its ongoing strategy to diversify its revenue and geographic reach. The hardware and home-improvement unit gets 90 percent of its revenue from North America and more than 50 percent of its revenue from U.S. home-improvement stores.
Both companies' boards have approved the transaction.
Spectrum Brands shares climbed $4.88, or 11.9 percent, to close at $46.04 Tuesday. Stanley Black & Decker shares shed $1.99, or 2.7 percent, to $72.24.
Stanley Black & Decker anticipates the transaction will result in $1.3 billion in proceeds after taxes. It plans to use a majority of the proceeds to buy back shares and a smaller portion to reduce debt. The remaining proceeds, along with offshore capital, will be used to pay for its previously announced acquisition of Infastech, a Hong Kong company that makes fasteners.