The Stanley Works announced that it has entered into a definitive agreement to acquire Security Group, Inc., which is comprised of two primary operating companies: Sargent & Greenleaf, Inc. and The Safemasters Co., Inc.
Sargent & Greenleaf, Inc., headquartered near Lexington, Ky., is a leading manufacturer of medium and high security locks and locking systems for the financial, government and retail markets.
The Safemasters Co., Inc., headquartered in the Washington, D.C. area is a leading North American access control provider offering a wide variety of physical security installation, maintenance and repair services, with emphasis on mechanical locking systems.
According to a Stanley Works statement, the move will allow Stanley to expands the current product offering in high value-added mechanical and electronic locking systems, expand the company's security solutions national service network, with over 150 field-based sales and service personnel in North America, and help strengthen Stanley Security Solutions in the financial, government and retail industry markets.
Closing for the transaction is subject to regulatory approval, and other consents and conditions, but the anticipated closing date is later in the fourth quarter of 2004 or early in the first quarter of 2005.
In addition, the company announced that Stanley Security Solutions recently completed a smaller acquisition of Cal-Dor Specialties, Inc., a premier distributor of Stanley and other security products and services in Southern California.
Total consideration for the two acquisitions will approximate $56 million, comprised approximately of $49 million cash and $7 million notes payable, an average purchase price of approximately 1.0 times annual sales and approximately 7 times EBITDA (earnings before interest, taxes, depreciation and amortization).
The move follows the company's planned sale of its home decor business, and the new acquisitions are expected to replace that division's revenues.
"We expect our portfolio repositioning to continue into 2005," said John Lundgren, chairman and CEO of The Stanley Works in a prepared statement. "The successful Blick plc and Frisco Bay integrations in 2004 built upon the previous Best Access Systems acquisition in demonstrating our ability to do so."