Topic: Growth Stocks

The Wall Street Stock Forecaster Hotline – Friday, November 6, 2009

Article Excerpt

THE STANLEY WORKS, $49.19, New York symbol SWK, has agreed to buy rival toolmaker Black & Decker Corp. (New York symbol BDK) for $4.5 billion in stock. That’s 12.5% more than Stanley’s $4-billion market cap. Assuming both companies’ shareholders approve, the deal should close in the first half of 2010. Stanley shareholders will own 50.5% of the combined company (to be called “Stanley Black & Decker”). Black & Decker investors will own the remaining 49.5%. This looks like a good move for Stanley. Black & Decker specializes in power tools, so there’s little overlap with Stanley’s hand tools. Moreover, Black & Decker’s security products, which include door locks and keyless-entry systems, are a nice fit with Stanley’s building-security business. Stanley feels that it can find $350 million in annual savings by the end of the third year following the merger. Most of these will come from combining manufacturing plants, distribution networks and purchasing systems. The savings would add $1.00 a share to Stanley’s…