New Britain tool manufacturer Stanley Black & Decker is in negotiations to acquire Ohio outdoor lawnmower maker MTD amid a strong second quarter, and a continuation of the pandemic-sparked trend in home improvement.
“MTD brings superb product engineering and manufacturing expertise in outdoor power equipment, [and] capabilities in robotics technology,” Stanley CEO Jim Loree told shareholders in a Tuesday morning earnings call. “The strategic fit is hand-in-glove, and the revenue and cost synergy opportunities are compelling.”
Stanley 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. In January, when Loree first said Stanley would approach MTD about exercising the option, he said the acquisition could add up to $3 billion of revenue in 2022.
The move comes as Stanley reported record sales in the second quarter, spurred by continued growth in its tools business, which could suggest that the phenomenon of home-bound people working on home improvement projects could outlive the pandemic, Loree said.
“We are expecting that the key market drivers across our global tools markets will continue to be strong demand drivers and support tools growth for some time — including the secular surge in consumers’ reconnection with the home and garden,” Loree said.
From April to June, Stanley posted nearly $455 million in profits — or $2.81 per diluted share — a 95% surge from the same period last year, when the manufacturer saw just under $234 million — $1.52 per diluted share — in profits.
Sales in 2021’s second quarter were $4.3 billion, about 37% higher than 2020’s second quarter sales of $3.1 billion. Stanley’s tools and storage business segment was the company’s strongest last quarter, with nearly $3.2 billion in sales, a 45% jump from the same period last year.
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