Stanley Black & Decker plans to acquire the remaining 80% of Ohio outdoor lawnmower maker MTD, following a blockbuster 2020 for the New Britain-based toolmaker, primarily driven by a boom in home improvement sales.
Stanley Black & Decker acquired 20% of Ohio-based MTD for $234 million in 2018, and the deal included an option to acquire the remaining 80% within a decade of the initial deal, CEO Jim Loree told shareholders in a Thursday morning call.Â
“We expect to implement or exercise the option in late ’21, and begin to recognize revenue subsequent to regulatory approvals,” Loree said. “[The action creates] the potential addition of up to $3 billion of revenue from the MTD transaction in 2022.”
The move comes after a year in which Stanley saw a bright silver lining to the COVID-19 pandemic: a phenomenon of home-bound people buying Stanley tools online and at retail outlets to work on home improvement projects.
In the final three months of 2020, Stanley saw profits of $458 million, or $2.88 per diluted share; 130% higher than 2019’s fourth quarter when the company earned $199.1 million.
Year-over-year, Stanley’s profit rose 26% with $1.2 billion in 2020, compared with just under $956 million the year before.
Sales in 2020’s fourth quarter were $4.4 billion, 18% higher than 2019’s fourth quarter sales of $3.7 billion. For the year, Stanley did $14.5 billion in sales, compared with $14.4 billion in 2019.
Based on last year’s numbers and an unusually strong January so far, Stanley is operating under the assumption of continued growth, with CFO Don Allan projecting company-wide growth of 4% to 8% in 2021, with growth in every business sector.
Additionally, Loree told shareholders Stanley and MTD plan to launch a number of new products to the market.
“[Stanley] will expand our battery and electric powered offerings, and push mowers, power washers and hand-held products,” Loree said, adding that MTD will release new hand-held products, and an autonomous robotic mower to the European market this year.
“As you can see, we’ve been busy working our partnership with MTD, and there is a lot to be excited about,” Loree said.
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