Stanley Black and Decker Buys Into MTD, Option for Full Buyout
Apparently, Stanley Black and Decker is in pretty solid financial shape after their purchase and public relaunch of Craftsman. Next on their radar is MTD, a wide-reaching lawn care company that includes Cub Cadet, Troy-Bilt, Remington, Robomow, Yard Machines, Rover, Wolf-Garten, and Bolens. So Stanley Black and Decker buys into MTD, what’s next?
Just the Facts
- SBD is buying a 20 percent stake in MTD for $234 million in cash
- SBD has the option of a full buyout beginning July 1, 2021
- MTD’s 2017 revenues are over $2 billion
- SBD’s 2017 revenues totaled $12.7 billion
- Deal expected to close in early 2019
Stanley Black and Decker Buys Into MTD – Details of the Deal
Stanley Black and Decker is buying into MTD with a 20 percent stake for $234 million in cash. While that’s not a ton of money in today’s business terms, it’s interesting that SBD can make that kind of cash offer on the heels of their purchase and relaunch of Craftsman. That deal was for $900 million.
Stanley Black and Decker will have the option to purchase the remaining 80 percent of MTD for a predetermined EBITDA multiplier (earnings before interest, tax, depreciation, and amortization) starting on July 1, 2021.
It’s a move that makes a lot of sense and there’s some forward thinking. MTD is one of SBD’s partners in the development of Craftsman’s lawn care line. According to the press release, the deal helps the two brands seek revenue opportunities and develop “innovative products for professional and residential outdoor equipment customers.”
Cub Cadet has the only real professional presence currently in the US and we expect SBD to continue that side of the business. Perhaps they’re looking at further developing DeWalt’s commercial lithium-ion OPE products as well, but the press release doesn’t address any of that specifically.
Regardless of how many brands this deal stands to benefit under the Stanley Black and Decker umbrella, expect a larger push into the $20 billion global lawn and garden sector.