Securitas to Acquire Stanley Security for $3.2B
Stanley Security is expected to generate revenue of nearly $1.7 billion this year and will give Securitas a bigger global footprint.
NEW BRITAIN, Conn. — Stanley Black & Decker (NYSE: SWK) announced Wednesday it has signed a definitive agreement to sell its systems integeration unit, Stanley Security, to Securitas AB for $3.2 billion in cash.
The proposed transaction includes Stanley Black & Decker’s Commercial Electronic and Healthcare Security business lines. The businesses carry 2021 forecasted revenues of approximately $1.7 billion with an adjusted EBITDA margin in the low double-digits, implying a purchase price multiple of approximately 16 trailing adjusted EBITDA, according to the announcement.
Net proceeds from the sale are expected to be used to fund, in part, an approximately $4 billion share repurchase which is planned to be completed in 2022. The transaction does not include Stanley Access Technologies, which is a leader in the industry with state-of-the-art automatic door solutions.
“The sale of Security is consistent with our commitment to generating substantial shareholder value and allows us to sharpen our strategic focus on growing our core businesses while also returning capital to investors through a significant share buyback,” states James Loree, Stanley Black & Decker’s CEO.
Loree continues, “This transaction is a result of our active approach to portfolio management, and the attractive valuation we received reflects the investments we made in transforming our Security business over the last several years. The business is well positioned for ongoing growth within Securitas, a global leader in the security industry. On behalf of the entire Stanley Black & Decker organization, I want to thank our Security team members for their valuable contributions over the years.”
The transaction has been approved by the Boards of Directors of Stanley Black & Decker and Sweden’s Securitas, and is expected to close in the first half of 2022. The closing is contingent upon receiving regulatory approvals and other customary closing conditions.
The approximately $4 billion share repurchase program is expected to commence in 2022 with $2-$2.5 billion expected to occur in the first quarter and the remainder the company expects to complete in the summer of 2022. The company’s capital allocation strategy reflects its commitment to substantial capital return, strong investment grade credit ratings and opportunistic strategic value-creating M&A, according to the announcement.
“We are incredibly excited to join forces with Stanley Security and are confident that we will form a winning team,” says Magnus Ahlqvist, Securitas AB president and CEO. “Together, we will be perfectly placed to deliver outstanding expertise and potential for innovation which will create extraordinary opportunities not only for our shareholders, but for our colleagues and our hundreds of thousands of customers around the world.”
Donald Allan, Jr., Stanley Black & Decker’s president and CFO, comments, “Three years ago we initiated a digital transformation in Security with investments in people, new partnerships and innovative commercial solutions to establish these businesses as leaders with a strong growth trajectory in their respective markets. The team has made incredible progress and the new combination with Securitas will provide them the best platform for the next stage of success.”
In a seperate announcement, Securitas, states, “Together with Stanley Security, our largest acquisition in history, the profile of Securitas changes from a leading guarding company with electronic security and solutions capabilities, to a leading intelligent security solutions partner.”
The statement continues, “The future of security is built around the combination of global presence, connected technology and intelligent use of data and, together with Stanley Security, Securitas is perfectly placed to win in this environment.”
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