Stanley Black & Decker To Sell Security Business To Securitas For $3.2B

Stanley Black & Decker, Inc. SWK has agreed to sell most of its Security assets, including, Commercial Electronic and Healthcare Security business lines, to Securitas AB SCTBF for $3.2 billion in cash.

• For FY21 Security business is expected to generate revenues of ~$1.7 billion with an adjusted EBITDA margin in the low double-digits, implying a purchase price multiple of ~16 trailing adjusted EBITDA.
• The company will use $3 billion of net proceeds towards a planned $4 billion share repurchase program that is expected to complete in 2022, with $2 billion - $2.5 billion expected to occur in the first quarter and the remainder in the summer of 2022.
• The transaction does not include Stanley Access Technologies; and is expected to close in the first half of 2022.
• "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," said CEO James Loree.
• Outlook: Stanley Black & Decker reaffirmed its FY21 EPS guidance of $9.70 - $10.05 on a GAAP basis and $10.70 - $10.90 on a non-GAAP adjusted basis.
• Price Action: SWK shares closed higher by 0.92% at $186.05 on Tuesday.