Deutsche Bank Discusses Stanley, Black & Decker Acquisition

Deutsche Bank has a Buy rating and a $90 price target on shares of Stanley Black & Decker, Inc. SWK after it was reported this morning that Stanley Black & Decker had made a bid for Niscayah. In a note to clients, Deutsche Bank writes, "Stanley is projecting EPS accretion of 20c in Yr1 and 45c in Yr2 - these are meaningful tailwinds that look reasonable given that the deal is being funded via cash. We also believe the deal will earn a double digit return on capital post cost-savings. While the financial merits look clear, our major area of concern at this stage is that the Niscayah integration could be complex and distracting from the ongoing Black & Decker process. However we highlight that Stanley management has a solid, largely unblemished track record of successful deal execution and so we believe this announcement will be viewed positively by the market." Shares of SWK lost $1.78 yesterday to close at $69.28, a loss of 2.5%.