Stanley Black & Decker Inc. has Put up Its Hardware and Home-Improvement Unit for Sale

Stanley Black & Decker Inc. has put up its hardware and home-improvement unit for sale in an auction that could fetch around $1.5 billion, people familiar with the matter said. The unit, part of Black & Decker before its 2010 merger with Stanley, makes door locks, bath fixtures and other home accessories under brands such as Baldwin, Kwikset and Price Pfister. Based in New Britain, Conn., Stanley Black & Decker makes a range of hardware, tools and industrial equipment. Stanley and Black & Decker merged in 2010 in a $4.5 billion all-stock deal amid a collapse in the housing market, combining Stanley's black-and-yellow hand tools and hardware with Black & Decker's power tools and door knobs. The company has a market capitalization of about $10.6 billion, with shares recently trading at around $62, down about 8% since the beginning of the year. The home and hardware business is a relatively high-margin one, but the company doesn't consider it an area of focus and would rather invest the cash elsewhere, the people said. The unit's annual earnings before interest, taxes, depreciation and amortization, or Ebidta, total around $190 million, they said. Goldman Sachs Group Inc. GS -1.40%is running the sale process and recently sent financial information to potential buyers, including industrial-sector companies and private-equity firms, they said. While some of Stanley Black & Decker's competitors would like to acquire certain parts of the for-sale business, its disparate product lines make it difficult to sell as a whole to some so-called strategic buyers, one of these people said. Representatives for Goldman Sachs and Stanley Black & Decker declined to comment. For private equity, the current availability of credit at attractive rates for midsize deals of up to $4 billion means they are able to pay more for companies using borrowed money. The more leverage firms can put into a deal, the higher its potential profits as well as risks. Several companies, especially in the industrial sector, are running auctions for parts of their business that have drawn interest from rivals and buyout firms. DuPont Co. is shedding its performance-coatings unit in an auction that could fetch up to $3 billion from private-equity suitors. Apex Tool Group, a two-year-old joint venture between Cooper Industries PLC and Danaher Corp. that sells hand and power tools, is being prepared for a sale by Goldman Sachs, according to people familiar with the matter. Source: wsj.com