Machine tools and accessories maker,
Stanley Black & Decker, Inc.
) 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.
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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
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
), holding a Zacks Rank #1 (Strong Buy) along with
Atlas Copco AB
), both holding a Zacks Rank #2 (Buy).