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Stanley Black (SWK) to Sell Infrastructure Business for $760M
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Stanley Black & Decker, Inc. (SWK - Free Report) recently entered into a deal to divest its STANLEY Infrastructure (Infrastructure) business to Epiroc AB for a cash amount of $760 million.
As a manufacturer of attachment and handheld hydraulic tools, SWK’s Infrastructure business is likely to generate revenues of approximately $450-$470 million in 2023. Its adjusted EBITDA margin is expected to be in the mid-to-high teens digits in the same period.
The divestment will help Stanley Black to focus on the company’s core businesses while supporting its capital-allocation priorities. The company expects to use the cash proceeds of the transaction, net of modest taxes, to reduce its debt.
As a result of the divestment, SWK expects to incur approximately $100-$150 million of a pre-tax, non-cash charge in 2023.
The Infrastructure business’ results will be included in the continuing operations until the transaction closes. The completion of the deal is conditioned on regulatory approvals and customary closing conditions.
Lately, SWK has been divesting non-core operations to drive growth. In July 2022, the company sold its Security Business to Securitas AB for $3.2 billion. Stanley Black funded its debt reduction from the net proceeds of this sale.
Price Performance
In the past year, SWK stock has gained 31.9% compared with the industry’s 38% increase.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Stanley Black currently carries a Zacks Rank #3 (Hold). Some better-ranked companies from the Industrial Products sector are discussed below:
FLS delivered a trailing four-quarter average earnings surprise of 27.3%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2023 earnings has increased 2.5%. The stock has risen 36.7% in the past year.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 13.9%.
The consensus estimate for AIT’s fiscal 2024 earnings has increased 3.3% in the past 60 days. Shares of Applied Industrial have jumped 39.8% in the past year.
A. O. Smith Corporation (AOS - Free Report) currently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 14%.
In the past 60 days, the consensus estimate for A. O. Smith’s 2023 earnings has improved 4.4%. The stock has risen 41.2% in the past year.
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Stanley Black (SWK) to Sell Infrastructure Business for $760M
Stanley Black & Decker, Inc. (SWK - Free Report) recently entered into a deal to divest its STANLEY Infrastructure (Infrastructure) business to Epiroc AB for a cash amount of $760 million.
As a manufacturer of attachment and handheld hydraulic tools, SWK’s Infrastructure business is likely to generate revenues of approximately $450-$470 million in 2023. Its adjusted EBITDA margin is expected to be in the mid-to-high teens digits in the same period.
The divestment will help Stanley Black to focus on the company’s core businesses while supporting its capital-allocation priorities. The company expects to use the cash proceeds of the transaction, net of modest taxes, to reduce its debt.
As a result of the divestment, SWK expects to incur approximately $100-$150 million of a pre-tax, non-cash charge in 2023.
The Infrastructure business’ results will be included in the continuing operations until the transaction closes. The completion of the deal is conditioned on regulatory approvals and customary closing conditions.
Lately, SWK has been divesting non-core operations to drive growth. In July 2022, the company sold its Security Business to Securitas AB for $3.2 billion. Stanley Black funded its debt reduction from the net proceeds of this sale.
Price Performance
In the past year, SWK stock has gained 31.9% compared with the industry’s 38% increase.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Stanley Black currently carries a Zacks Rank #3 (Hold). Some better-ranked companies from the Industrial Products sector are discussed below:
Flowserve Corporation (FLS - Free Report) presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
FLS delivered a trailing four-quarter average earnings surprise of 27.3%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2023 earnings has increased 2.5%. The stock has risen 36.7% in the past year.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 13.9%.
The consensus estimate for AIT’s fiscal 2024 earnings has increased 3.3% in the past 60 days. Shares of Applied Industrial have jumped 39.8% in the past year.
A. O. Smith Corporation (AOS - Free Report) currently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 14%.
In the past 60 days, the consensus estimate for A. O. Smith’s 2023 earnings has improved 4.4%. The stock has risen 41.2% in the past year.