Stanley Black & Decker makes $234 million investment in MTD
|By Kristin Smith-Ely|
Option to acquire remaining assets of outdoor equipment company available in 2021.
Stanley Black & Decker, New Britain, Connecticut, has announced it has entered into a definitive agreement to acquire a 20 percent stake in MTD Products Inc., a privately held global manufacturer of outdoor power equipment based in Valley City, Ohio, for $234 million in cash. Under the terms of the agreement, Stanley Black & Decker has the option to acquire the remaining 80 percent of MTD beginning July 1, 2021.
Stanley Black & Decker President and CEO James M. Loree says, "This investment in MTD increases our presence in the $20 billion global lawn and garden market in a financially and operationally prudent way. We have always viewed outdoor products as an attractive growth category for us to expand our presence beyond handheld electric products. This transaction gives us the opportunity to do that with a world class partner. MTD has a first-rate management team, talented employees and a mission, values and commitment to innovation that are very closely aligned with our own, and we are excited to move forward with them."
"MTD and Stanley Black & Decker are both proven leaders in our respective industries with iconic brands and world class capabilities," says MTD's Chairman and CEO Robert T. Moll. "We're both passionate about innovation with complementary businesses. Ultimately, this will give us more resources to bring really exciting products to our consumers."
With 2017 revenues in excess of $2 billion, MTD manufactures and distributes lawn tractors, zero turn mowers, walk behind mowers, snow throwers, trimmers, chain saws, utility vehicles and other outdoor power equipment for both residential and professional lawn and garden customers. Founded over 85 years ago and headquartered in Valley City, Ohio, MTD's brands include Cub Cadet, Troy-Bilt, and Remington, among others. MTD has state-of-the-art manufacturing facilities in North America, Europe and Asia, and a global distribution network.
This partnership significantly enhances Stanley Black & Decker and MTD's existing commercial relationship, which currently includes the manufacture of select outdoor products under the Craftsman brand. Going forward, the two companies will work together to pursue revenue and cost opportunities, improve operational efficiency and introduce new and innovative products for professional and residential outdoor equipment customers, leveraging their respective portfolios of strong brands.
The transaction, which is expected to close in early 2019, is subject to regulatory approvals and customary closing conditions. In connection with the transaction, Stanley Black & Decker will appoint two representatives to MTD's 11-member Board of Directors. Beginning in 2021, should Stanley Black & Decker choose to exercise its right to acquire the remaining 80 percent stake, the companies have agreed to a valuation multiple based on MTD's expected 2018 EBITDA, with a sharing arrangement for any future EBITDA growth.
Stanley Black & Decker, an S&P 500 company, is a diversified global provider of hand tools, power tools and related accessories, electronic security solutions, healthcare solutions, engineered fastening systems, and more. Learn more at www.stanleyblackanddecker.com.
MTD is known for its award-winning products under brands such as Cub Cadet, Troy-Bilt, Remington, Robomow, Rover, WOLF-Garten and Yard Machines.