Stanley Black & Decker, Inc. ( SWK Quick Quote SWK - Free Report) recently entered into an agreement with Pipeline Technique Limited to divest its STANLEY oil & gas division. The financial terms of the transaction were kept under wraps. Shares of SWK declined 1.6% yesterday to eventually close the trading session at $107.5. Based in Aberdeenshire, Scotland, Pipeline Technique offers welding, field joint coating, non-destructive testing, fabrication, and other products and services to oil and gas industries. Inside the Headlines
The deal will involve Stanley Black to sell its oil & gas division, which includes the company’s pipeline services and equipment businesses. Its pipeline services and equipment businesses comprise three units, namely STANLEY Inspection, Pipeline Induction Heat Ltd. and CRC-Evans Pipeline International. The business contributed revenues of about $140 million in 2021. Some of the notable products offered by the unit are standard and unique nut products, threaded inserts screw thread inserts, torque tool solutions and breakstem rivets, among others.
The divestment is in sync with SWK’s strategy of restructuring its business portfolio. The transaction will enable Stanley Black to better focus on and efficiently direct its resources to the Industrial and Tools & Outdoor segments, thus offering shareholder value. SWK expects to bear a pre-tax, non-cash charge of about $125-$200 million for the divestment of this division. The completion of the transaction is subject to certain customary conditions. Zacks Rank, Price Performance and Earnings Estimate Trend
Stanley Black, with a $16.2-billion market capitalization, currently carries a Zacks Rank #4 (Sell). SWK stands to benefit from solid product offerings, a positive e-commerce trend and strengthening demand in the end markets. However, SWK has been dealing with escalating costs and expenses, which might affect its margins and profitability in the quarters ahead.
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Shares of SWK have lost 24.9% compared with the 22.9% decline of its
industry in the past three months. The Zacks Consensus Estimate for 2022 earnings has decreased 9.5% to $11.01 in the past 60 days. Earnings estimates for 2023 have moved 11.6% south to $12.63 during the same period. Stocks to Consider
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