dormakaba Acquires Mechanical Security Businesses from Stanley Black & Decker

dormakaba said it completed the acquisition of certain Mechanical Security businesses from Stanley Black & Decker and closed the transaction effective February 22, following satisfaction of customary closing conditions including the receipt of all necessary regulatory approvals. The transaction was first announced on December 21, 2016.
 
With this acquisition, dormakaba can offer the full portfolio of door hardware and access control solutions to customers. In addition, the acquisition significantly enhances dormakaba’s prospects for further profitable growth, mainly through:
 

• A large installed base across North America, with currently hundreds of thousands of end-user sites across North America, providing dormakaba with an attractive and stable repeat business and opportunities for future upgrades;
• Strengthened market position with the addition of the well-recognized industry brands including “BEST” and“PHI”;
• Improved position in growing verticals such as education and healthcare, complementing dormakaba’s strongposition in hospitality, multi-housing and government;
• Established specification writing capabilities, allowing dormakaba to compete in additional construction bids;
• Enhanced product breadth with a broad range of mechanical security solutions as well as wireless and cloud-based electronic locks.

 

As previously announced, the transaction encompasses Stanley Commercial Hardware based mainly across North America and a production facility in Taiwan, as well as GMT in China. Full operational integration is expected to take up to three years. The dormakaba post-merger integration process in North America and in Asia is well advanced, thereby allowing for a successful integration of this acquisition.
 
With the closing of the transaction, Philip Bradney will join dormakaba and will take over managing responsibility for the acquired businesses in North America. Bradney has decades-long experience in the industry. For more than  twenty years he held senior management positions at BEST Access Systems and then Stanley, guiding the company’s integration into Stanley Black & Decker until 2006.
 
The transaction is expected to be neutral to EBITDA margin of dormakaba from closing and accretive from full year 2019/2020 onwards, and immediately accretive to earnings per share. The acquisition implies a pre- synergies EV/EBITDA multiple of 13.8x on a 2016E basis (9x multiple post expected revenue and cost synergies to be achieved within four years, and tax benefits). The acquisition is fully debt financed by an increase in the existing syndicated bankcredit facility.