SWK Completes Acquiring Infastech - Analyst Blog
February 28 2013 - 7:00AM
Zacks
Machine tools and accessories
maker, Stanley Black & Decker, Inc. (SWK)
successfully completed acquiring Infastech on February 27, 2013
from CVC Capital Partners and Standard Chartered Private Equity
Limited for a total cash consideration of $850 million.
The transaction was originally announced on July 23, 2012.
Infastech is one of the leading manufacturers and suppliers of
specialty engineered fastening technologies in Hong Kong. It has a
diversified client base in the industrial, electronics, automotive,
construction and aerospace end markets in over 150 countries across
the world. The company’s well-known brands include Avdel®, ELCO®
and iFormTM; its prime end markets for the combined business will
include automotive manufacturing and electronics.
The acquisition will enhance Stanley’s revenue generation capacity
as well as add around 2,000 employees to its workforce. Earnings
accretion is expected immediately with roughly 20 cents in 2013 and
40 cents by 2015. It is anticipated that there would be annual cost
savings of roughly $25 million by 2015 while the first two years of
acquisition will see roughly $30 million of acquisition related
charges.
Historically, acquisitions and divestments have been the company’s
primary tools for progressing on a growth strategy of shifting its
business portfolio toward favored growth markets. The recent
Infastech acquisition is, therefore, likely to fulfill Stanley’s
goal of generating above 20% revenue from the emerging markets.
Infastech together with Stanley’s engineered fastening platform,
Emhart, is likely to generate 40% of their combined revenue in the
Asia-Pacific region, which will likely push the overall company’s
revenue generation from this region to 16%.
The current Zacks Consensus Estimate for the first quarter of 2013
is $1.02, representing a year-over-year decline of 6.8%. Estimates
for 2013 and 2014 are $5.50 and $6.37, reflecting annual growth of
17.7% and 15.8%, respectively.
Stanley Black & Decker currently carries a Zacks Rank #5
(Strong Sell). Other stocks to watch out for in the industry are
Sandvik AB (SDVKY), holding a Zacks Rank #1
(Strong Buy) along with Atlas Copco AB (ATLKY) and
Kaydon Corporation (KDN), both holding a Zacks
Rank #2 (Buy).
ATLAS COP-ADR A (ATLKY): Get Free Report
KAYDON CORP (KDN): Free Stock Analysis Report
SANDVIK AB (SDVKY): Get Free Report
STANLEY B&D INC (SWK): Free Stock Analysis Report
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