Stanley Works Inc. expressed confidence that it can achieve its previously stated financial targets for its U.S. $4.5 billion acquisition of Black & Decker Corp. Stanley also said it expects the deal to close by the end of the first quarter or the beginning of the second quarter.
Stanley expects the business combination to boost per-share earnings by about $1 by the third year after the deal closes, based on $350 million in annual cost savings and opportunity to improve margins, according to the slides. It also expects about $1 billion in free cash flow and more than $1.5 billion in earnings before interest, taxes, depreciation and amortization by year three.
Both companies must obtain shareholder approval and regulatory approval from the European Union and other foreign jurisdictions.
Under terms of the deal, announced Nov. 2, Black & Decker shareholders will receive 1.275 shares of Stanley for each share. Based on Tuesday's closing price, that values Black & Decker at $67.97, a 27% premium. Stanley shareholders will hold a 50.5% majority stake in the combined company.
(Source: Dow Jones Newswires)
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