Fortune Brands Announces Agreement to Acquire Emtek and Schaub Premium Residential Hardware Brands and the U.S. and Canadian Yale and August Residential Smart Lock Brands from ASSA ABLOY
December 01 2022 - 11:59PM
Business Wire
- Yale and August add scale and breadth to Fortune Brands’
complementary security and connected smart home portfolio in the
U.S. and Canada
- Emtek and Schaub lead entry into new, highly synergistic
premium brand-led category
- Transaction supports Fortune Brands’ disciplined inorganic
growth strategy and augments its opportunities in supercharged
categories
Fortune Brands Home & Security, Inc. (“FBHS,” “Fortune
Brands” or the “Company”), an industry-leading home and security
products company, today announced it has entered into a definitive
agreement to acquire the Emtek and Schaub premium and luxury door
and cabinet hardware business and the U.S. and Canadian Yale and
August residential smart home locks business (collectively the
“Business”) from ASSA ABLOY, Inc. (a subsidiary of ASSA ABLOY AB),
for a purchase price of $800 million, or approximately $700 million
net of tax benefits, in cash on a cash-free, debt-free basis,
subject to customary adjustments (collectively, the
“Acquisition”).
“This Acquisition is perfectly aligned to our strategy as a
brand, innovation and channel leader. Yale and August will bring
two great brands and significant engineering expertise into our
already powerful security portfolio. Emtek and Schaub allow us to
enter a branded, growing and highly profitable category in a
leadership position, where we can accelerate innovation and
leverage our channel and consumer insights to create significant
value over time,” said Fortune Brands Chief Executive Officer
Nicholas Fink. “This transaction is consistent with Fortune Brands’
disciplined approach to value-creating acquisitions.”
“Together with our existing iconic brands, loyal channel
relationships, and supply chain expertise, we believe these
additions will result in enhanced, innovative products for
consumers and customers. We can accelerate growth and profitability
by deploying our Fortune Brands Advantage capabilities to create
value for all stakeholders,” added Fink.
With revenues of approximately $350 million in 2021, the
Business is comprised of leadership brands in the fast-growing
smart lock and the highly profitable and growing premium and luxury
hardware categories. Fortune Brands expects to add meaningful
growth and cost synergies to the Business over time.
Fortune Brands expects to receive tax benefits over a 15-year
period with a net present value of approximately $100 million, and
the net purchase price of $700 million equates to approximately
7.8x estimated 2022 adjusted EBITDA for the Business before
synergies.
The Acquisition is conditioned on the successful closing of the
acquisition by ASSA ABLOY from Spectrum Brands, Inc. of its
Hardware and Home Improvement business following a favorable
resolution of the court proceedings with the Department of Justice.
The Acquisition is expected to close in the second quarter of
2023.
About Fortune Brands
Fortune Brands Home & Security, Inc. (NYSE: FBHS),
headquartered in Deerfield, IL., is a Fortune 500 company, part of
the S&P 500 Index and a leader in the home products industry.
With trusted brands and market leadership positions in each of its
three operating segments, Water Innovations, Outdoors &
Security, and Cabinets, Fortune Brands’ 28,000 associates work with
a purpose to fulfill the dreams of home.
The Company’s growing portfolio of complementary businesses and
innovative brands includes Moen and the House of Rohl within Water
Innovations; outdoor living and security products from Therma-Tru,
LARSON, Fiberon, Master Lock and SentrySafe; and MasterBrand
Cabinets’ wide-ranging offerings from MANTRA, Diamond, Omega and
many more. Visit www.FBHS.com to learn more about FBHS, its brands
and how the Company is accelerating its environmental, social and
governance (ESG) commitments.
CAUTIONARY STATEMENT CONCERNING
FORWARD-LOOKING STATEMENTS
This press release contains certain “forward-looking statements”
made within the meaning of the Private Securities Litigation Reform
Act of 1995. Forward-looking statements include all statements that
are not historical statements of fact and those regarding our
intent, belief, or expectations. Statements preceded by, followed
by or that otherwise include the words “believes”, “positioned”,
“expects”, “estimates”, “plans”, “look to”, “outlook”, “intend”,
and similar expressions or future or conditional verbs such as
“will”, “should”, “would”, “may” and “could” are generally
forward-looking in nature and not historical facts. Where, in any
forward-looking statement, we express an expectation or belief as
to future results or events, such expectation or belief is based on
the current plans and expectations of our management. Although we
believe that these statements are based on reasonable assumptions,
they are subject to numerous factors, risks and uncertainties that
could cause actual outcomes and results to be materially different
from those indicated in such statements, including but not limited
to: unanticipated difficulties or expenditures relating to the
proposed transaction, including, without limitation, difficulties
that result in the failure to realize expected synergies,
efficiencies and cost savings from the proposed transaction within
the expected time period (if at all); legal proceedings, judgments
or settlements, including those that may be instituted against the
seller, its board of directors, executive officers and others
following the announcement of the proposed transaction; disruptions
of our or the Business’s current plans, operations and
relationships with customers, suppliers, distributors, business
partners and regulators caused by the announcement and pendency of
the proposed transaction; potential difficulties in employee
retention due to the announcement and pendency of the proposed
transaction; the possibility that the proposed transaction does not
close, including, but not limited to, failure to satisfy the
closing conditions; general business and economic conditions; our
reliance on the North American repair and remodel and new home
construction activity levels; our reliance on key customers and
suppliers; our ability to maintain our strong brands and to develop
innovative products while maintaining our competitive positions;
our ability to improve organizational productivity and global
supply chain efficiency; our ability to obtain raw materials and
finished goods in a timely and cost-effective manner; the impact of
sustained inflation, including global commodity and energy
availability and price volatility; the impact of trade-related
tariffs and risks with uncertain trade environments or changes in
government and industry regulatory standards; our ability to
attract and retain qualified personnel and other labor constraints;
the uncertainties relating to the impact of COVID-19 on the
Company’s business and results; our ability to achieve the
anticipated benefits of our strategic initiatives; our ability to
successfully execute our acquisition strategy and integrate
businesses that we have and may acquire; and the other factors
discussed in our securities filings, including in Item 1A of our
Annual Report on Form 10-K for the year ended December 31, 2021,
filed with the Securities and Exchange Commission. The
forward-looking statements included in this release are made as of
the date hereof, and except as required by law, we undertake no
obligation to update, amend or clarify any forward-looking
statements to reflect events, new information or circumstances
occurring after the date of this release.
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version on businesswire.com: https://www.businesswire.com/news/home/20221130006222/en/
FORTUNE BRANDS INVESTOR CONTACT: Investor.Questions@fbhs.com
FORTUNE BRANDS MEDIA CONTACT: Media.Relations@fbhs.com
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