The Stanley Works has announced plans to acquire all of the shares of Sonitrol Corporation, a U.S.-based alarm dealer and monitoring company. The purchase price for Sonitrol is approximately $275 million, roughly equivalent to 10 times EBITDA.
Sonitrol has made a name for itself by providing alarm systems and audio listening monitoring for its clients. The company's systems typically works by having traditional intrusion sensors placed in the business or home along with strategically placed microphones. When a sensor is triggered, the Sonitrol monitoring staff use the microphones to listen in for sounds of apparent intruders in the business, allowing them to audibly verify an alarm call.
Sonitrol will report into Stanley's Convergent Security Solutions business. Both Tony Byerly, COO, and Brett Bontrager, president, of Stanley CSS said the acquisition was a good fit Stanley.
"I think it's a real opportunity because it adds presence in markets we’re already in," said Bontrager. "There's an ability to create additional relationships with franchises. Our intention is to sit down with the franchisees and put a strategy going forward. We’re focused on a win-win relationship."
"As we have worked through the last 5 years, Stanley has been going through a portfolio shift," said Bontrager. "The heritage tools business remains a strong business, but we’ve also put a lot of focus on growing our business away from the home centers. Security now represents about $1.4 billion of our business; it’s more than 30 precent of our business."
According to Byerly, the acquisition will give Stanley's combined security business over 350 sales associates and over 600 field technicians. Byerly said the acquisition puts Stanley's security business into 40 new markets that the company is not in today.
"Looking forward in the total integration plans, I see options to leverage the technical sides of both houses," said Byerly.
Byerly added that the acquisition of Sonitrol, which is one of top 10 largest alarm companies in the U.S., moves Stanley to a No. 3 position in total revenue.
At the same time as it funds the purchase of the Sonitrol acquisition, Stanley is also selling off some divisions. Notably, the company has agreed to sell its CST/berger laser leveling and measuring business for $205 million. The buyer for that division, which has been based in West Lafayette, Ind., is the Robert Bosch Tool Corporation.
Stanley also announced plans to 'prune' some small, non-strategic product lines. Those product lines were not specified by Stanley, but the company did report that the units totaled some $60 million in revenues.
