Just a week after announcing plans to sell about 10 percent of its portfolio, including the Winter Sports businesses, Newell Brands said it entered into a definitive agreement to sell its Tools business, including the Irwin, Lenox and Hilmor brands, to Stanley Black & Decker.
Gross proceeds from the divestiture are expected to be $1.95 billion, which includes retained accounts receivable, subject to customary working capital and transaction adjustments. Net sales for the divested business were approximately $760 million for the last twelve months. The transaction is expected to close in the first half of 2017, subject to certain customary conditions, including regulatory approvals.
Proceeds will be primarily used to pay down debt in furtherance of the company’s stated goal of achieving a leverage ratio of 3 to 3.5 times EBITDA by the end of 2018. If the transaction were to be completed on December 31, 2016, the company would expect normalized EPS dilution of approximately 15 cents on an annualized basis after the benefit of short term cost actions and lower interest expense related to accelerated debt repayment. J.P. Morgan acted as financial advisor to Newell Brands on the transaction.
As announced on October 4, as the result of a recently completed strategic review of its portfolio, Newell Brands has taken the decision to hold a number of other businesses for sale including its two winter sports units, Völkl and K2, within the Outdoor Solutions Segment; its Heaters, Humidifiers, and Fans business within the Consumer Solutions Segment; and the Rubbermaid Consumer Storage business within the Home Solutions segment.
Other brands in the Outdoor Solutions segment acquired in its Jarden Group acquisition include Marker, Dalbello, Line, Full Tilt and Madshus in the Winter Sports segment as well as Zoot, the triathlon running shoe brand, and Squadra, the designer and manufacturer of custom cycling and triathlon apparel.
Newell Brands said Wednesday will retain its Dymo Industrial labeling business within the reported Tools segment. The total 2015 net sales of the remaining businesses held for sale is approximately $700 million. Sales processes are underway, and the company hopes to complete the divestiture of the remaining assets held for sale within the first half of 2017.
