As we recently reported, Stanley Black & Decker has acquired Irwin and Lenox tool brands from Newell Rubbermaid, who had recently put the tool brands on sale.
Some more information has come out about why Stanley Black & Decker are buying Irwin and Lenox, and what they plan to do with the brands.
Bullet Points
Irwin and Lenox are valued as a ~$760M/year (the last 12 months at least) manufacturer of hand tools and power tool accessories.
Together they also have a global footprint, much like many of Stanley Black & Decker’s brands, with a majority of sales in North America.
These brands also have a strong presence in electrical and plumbing trades, areas where brand such as Dewalt have indeed been somewhat absent from.
Interesting, the Irwin and Lenox tool business breakdown is as follows:
- 25% drilling
- 20% linear edge (aka straight saw blades)
- 18% band saw blades
- 18% pliers and holding tools (aka clamps)
- 12% circular saw blades and cutting tools
- 7% other hand tools
Irwin represents 60% of the combined revenue, and Lenox 40%.
Stanley Black & Decker said that Irwin and Lenox are high attractive, due to their strong brands, complementary products, and new channels.
I still cannot shake the idea that this acquisition might have at least been partially motivated by a desire to deprive other brands, such as Milwaukee and TTI, of the same acquisition opportunity. But I suppose that if this did factor into the decision, it’s not something they can discuss openly.
Brand Summaries & Breakdowns
- Irwin power tool accessories: ~27%
- Irwin hand tools: ~33%
- Lenox power tool accessories: ~35%
- Lenox hand tools: ~5%
I would have guessed Irwin to have the bigger power tool accessory business, but according to these numbers, Lenox’s revenue figures are nearly 30% higher.
Potential Revenue Opportunities
Taken straight from the presentation:
- Geographic Expansion
- Industrial Channel
- Expand Product Distribution Points
- Leverage Irwin®| Lenox® Mobile Conversion Program
- Retail Channel
- Partner Programs & Portfolio Management
- MiUSA Expansion
I’m not sure what that Retail Channel part means, but this deal will give Stanley Black & Decker a further push in Lowes stores, where there seems to be a stronger Irwin tools presence than ever before.
Brand and Product Expansion:
(Keep in mind that these are potential and not definite opportunities.)
- Lenox power tools
- Dewalt and Stanley accessories
- Lenox and Irwin storage
Irwin does make a single construction foam tool box, but sadly that’s the extent of the Irwin storage products that I know of.
Dewalt and Stanley accessories? That makes sense. Bring some Irwin and Lenox accessories to SBD brands’ portfolios.
Lenox power tools? I suppose this could make sense when taking into account different regions or distribution channels. I really can’t imagine it, though. SBD is already juggling enough cordless power tool brands.
One final bullet point is that the acquisition could increase global cross-branding opportunities for tools & storage business. Interesting. So… that means “lick and stick” rebranding depending on the global sales region and local brand preferences?
What kinds of questions do you have about this acquisition?
Source: SBD Investor Relations Presentation
P.S. I know what N. America, EMEA, and APAC are. EMEA = Europe, Middle East, and Africa, and APAC is Asia Pacific. What’s LAG? Latin America and…? What’s the G stand for?
Update: LAG = Latin America Group – thanks Bill, Dan, and Nathan!
