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Stanley currently has a 5.8% stake in Niscayah, which was acquired through the company’s wholly-owned Swedish subsidiary.
Stanley would offer SEK18 per share, implying $2.78, which represents a 15% premium to Niscayah's stock price at close on June 23, 2011. The offer price also represents a 24% premium to the current value of Securitas AB's all-stock offer to acquire Niscayah. Securitas AB had proposed to acquire Niscayah on May 16.
The company will use its existing offshore cash resources for funding the acquisition. The transaction is expected to close in September 2011.
Niscayah is a leading commercial security and monitoring company specializing in electronic security services and solutions gaining a foothold across Europe and the Nordic Region, as well as in the United States. Estimated revenues from Niscayah for fiscal 2011 are approximately $1 billion.
With the acquisition, the company would enhance its existing security product offerings. The acquisition would also help Stanley to expand its footprint internationally.
Management expects annual cost savings of $80 million from the merger, with more than half being realized in the first year after closing. Moreover, the acquisition will be accretive to EPS by 20 cents in year one and 45 cents by year three.
An independent committee of the target company’s board has advised that shareholders and warrant holders accept the deal. Further, shareholders having 19.5% stake in Niscayah have consented to the offer.
Stanley Black & Decker manufactures tools and engineered security solutions across the globe. Prime competitors of the company are Danaher Corp. ( DHR - Analyst Report ) , Makita Corp. ( MKTAY ) , and Snap-on Inc. ( SNA - Analyst Report ) .
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