Stanley Black & Decker will acquire a 20 percent stake in MTD Products, a privately held global manufacturer of outdoor power equipment, for $234 million in cash.
Under the terms of the agreement, Stanley Black & Decker has the option to acquire the remaining 80 percent of MTD beginning on July 1, 2021.
Stanley Black & Decker, an S&P 500 company, is a global provider of hand tools, power tools and related accessories, electronic security solutions, healthcare solutions, engineered fastening systems and more.
“This investment in MTD increases our presence in the $20 billion global lawn and garden market in a financially and operationally prudent way,” said Stanley Black & Decker’s president and CEO James M. Loree. “We have always viewed outdoor products as an attractive growth category for us to expand our presence beyond handheld electric products. This transaction gives us the opportunity to do that with a world-class partner. MTD has a first-rate management team, talented employees and a mission, values and commitment to innovation that are very closely aligned with our own, and we are excited to move forward with them.”
With 2017 revenues of more than $2 billion, MTD manufactures and distributes lawn tractors, zero-turn mowers, walk-behind mowers, snow throwers, trimmers, chainsaws, utility vehicles and other outdoor power equipment for both residential and professional lawn and garden customers.
Founded more than 85 years ago and headquartered in Valley City, Ohio, MTD’s brands include Cub Cadet, Troy-Bilt, Robomow and Remington, among others. MTD has manufacturing facilities in North America, Europe and Asia, along with a global distribution network.
“MTD and Stanley Black & Decker are both proven leaders in our respective industries with iconic brands and world class capabilities,” said MTD’s chairman and CEO Robert T. Moll. “We’re both passionate about innovation with complementary businesses. Ultimately, this will give us more resources to bring really exciting products to our consumers.”
This partnership enhances Stanley Black & Decker and MTD’s existing commercial relationship, which currently includes the manufacture of select outdoor products under the Craftsman brand, according to the company.
The transaction, which is expected to close in early 2019, is subject to regulatory approvals and customary closing conditions. In connection with the transaction, Stanley Black & Decker will appoint two representatives to MTD’s 11-member board of directors.
Beginning in 2021, should Stanley Black & Decker choose to exercise its right to acquire the remaining 80 percent stake, the companies have agreed to a valuation multiple based on MTD’s expected 2018 earnings before interest, taxes, depreciation and amortization (EBITDA), with a sharing arrangement for any future EBITDA growth.
