Stanley Black & Decker, Inc. · NYSE:SWK
Stanley Black & Decker — Stanley Works — Merger or Acquisition (November 2009)
26 slides from Stanley Black & Decker's merger presentation, Nov 3, 2009
Slide 1: A Powerful Legacy, A Future of Growth
A POWERFUL LEGACY, A FUTURE OF GROWTH November 3,
Slide 2: Forward Looking Statements
Forward Looking Statements CAUTIONARY STATEMENTS Under the Private Securities Litigation Reform Act of 1995 Statements in this presentation that are not historical, including but not limited to those regarding the consummation of the proposed transaction between Stanley and Black & Decker and the re
Slide 3: Chairman & Chief Executive Officer
Chairman & Chief Executive Officer The Stanley Works John F. Lundgren Chairman, President & Chief Executive Officer The Black & Decker Corporation Nolan D. Archibald
Slide 4: Two Companies With Great Legacies, Rich and Enduring Histories
Two Companies With Great Legacies Rich and Enduring Histories • Established In 1843 By Frederick Trent Stanley, Who Founded A Small Hardware Manufacturing Shop In New Britain, CT • 166 Year Reputation For Product Quality And Service • 133 Years Of Consecutive Dividends • World Class Hand Tools Portf
Slide 5: Compelling Strategic And Financial Benefits
Compelling Strategic And Financial Benefits Strategic Benefits Financial Benefits § A Global Leader In Hand and Power Tools § Iconic Brand Portfolio - Over 250 Years Of Combined History § Greater Scale In Hand And Power Tools & Storage, Mechanical Security, And Engineered Fastening § World Class Inn
Slide 6: Transaction Highlights
Transaction Highlights Exchange Ratio Fixed Ratio Of 1.275 Shares Of SWK For Each Share Of BDK Implied 22.1% Premium To BDK As Of 10/30/09 Ownership 50.5% Stanley / 49.5% Black & Decker Accretion EPS Accretion Of Approximately $1.00 Per Share Projected By Year 3 Synergies $350M Cost Synergies Annual
Slide 7: Highly Complementary Iconic Brands
Highly Complementary Iconic Brands Well Known Brands Across All Segments World- Class Brand Portfolio CDIY Security Industrial Industrial Engineered Fastening Hardware & Home Improvement
Slide 8: Comprehensive Product Offering, No Significant Product Line Overlap
Comprehensive Product Offering No Significant Product Line Overlap
Slide 9: Attractive Positions In Markets And Channels Worldwide
Attractive Positions In Markets And Channels Worldwide An Industry Leading Array Of Products & Services Superior Track Record Of Innovation World Class Operations And Global Sourcing Compelling Strategic Combination § Operations In 45 Countries With Strong Positions In North America, Europe, Middle
Slide 10: Executive Vice President & Chief Operating Officer
Executive Vice President & Chief Operating Officer, The Stanley Works James M. Loree
Slide 11: Consistent With Strategic Objectives
Consistent With Strategic Objectives Stanley Strategic Framework In Place Since 2004 Be Selective and Operate In Markets Where: Pursue Growth On Multiple Fronts Through: Accelerate Progress Via Stanley Fulfillment System Maintain Portfolio Transition Momentum Strategic Benefits Of Combination Approx
Slide 12: Growth Platforms
Growth Platforms Existing Growth Platforms New Growth Platforms Capital Focused On Driving Growth Within Both Core and New Platforms… § Build Out Existing Platforms § Expand Into Adjacent Markets § Grow Through Acquisitions § Expand Existing Platforms § Grow Organically § Expand Internationally Via
Slide 13: Long-Term Capital Allocation Strategy
Long-Term Capital Allocation Strategy Long-Term Capital Allocation Objectives Capital Allocation Strategy Supports Strong Balance Sheet, Shareholder Returns & Continued Growth Capital Allocation Objectives Remain Intact § Target Strong Investment Grade Credit Rating § Invest Approximately 2/3 In Acq
Slide 14: A Diversified Global Leader: Revenue by Segment
A Diversified Global Leader Revenue by Segment Revenues Remain Diversified… Largest Customer 22% ~6% ~12% U.S. Home Centers & Mass Merchants 40% ~13% ~24% 2002 2008 Pro Forma …With 49% In CDIY Stanley 2009E Revenue: $3.7B* Black & Decker 2009E Revenue: $4.7B* Pro Forma 2009E Revenue: $8.4B Industria
Slide 15: SFS Can Be Leveraged Across Black & Decker Platform
SFS Can Be Leveraged Across Black & Decker Platform… Added Value of Stanley Fulfillment System (SFS) …With The Potential To Generate Significant Cash Flow From Higher Working Capital Turns 3.7x 3.7x 4.1x 2006A 2007A 2008A SWK BDK 7.0x 6.0x 5.0x 4.0x 3.0x 2.0x 1.0x 0.0x Δ= ~$500M
Slide 16: Vice President & Chief Financial Officer
Vice President & Chief Financial Officer, The Stanley Works Donald Allan Jr.
Slide 17: Successful Integration Track Record
Successful Integration Track Record Proven Integration Process Drives Significant Synergy Realization Integration Process Best Practices Operating Margin % § Integration Plan For First 100 Days Finalized Prior To Close § Consensus On Integration Plan With Both Management Teams Prior To Close § Integ
Slide 18: Cost Synergy Drivers
Cost Synergy Drivers $350 Million Of Cost Synergies Identified (4% Of Pro Forma Sales) One Time Cost Of $400 Million To Achieve Manufacturing And Distribution Purchasing Business Unit & Regional Integration Corporate Overhead § Plant Footprint Consolidation § Distribution Network Consolidation § Dir
Slide 19: Revenue Synergies
Revenue Synergies Combination Also Provides Substantial Revenue Synergy Potential Any Realized Revenue Synergies Represent Additional Future Upside To Financial Forecasts Specific Examples § Cross-Selling Opportunities For Products Of Both Companies In Mature Markets § Expanded Product Distribution
Slide 20: Pro Forma Financial Impact To Stanley
Pro Forma Financial Impact To Stanley Year 1 Year 2 Year 3 Annual Cost Synergies ($M) $125 $250 $350 Pro Forma GAAP EPS Accretion ($ per Fully Diluted Share) ($3.25) - ($3.00) $0.25 - $0.35 $0.95 - $1.05 Pro Forma Adjusted EPS Accretion ($ per Fully Diluted Share) ($0.45) - ($0.20) $0.50 - $0.60 $1.
Slide 21: Strong Credit Position
Strong Credit Position Standalone Combined 2009 Forecast 2009 PF Forecast Year 3 PF Forecast Synergies ($M) - - $350 EBITDA ($M) ~ $600 ~ $1,000 ~ $1,500 Free Cash Flow > $300 ~ $650 ~ $1,000 Debt/EBITDA 1.7x 2.9x ~1.4x Total Debt / Capitalization ~ 30% ~ 30% ~ 25% Current SWK Standalone Credit Rati
Slide 22: Liquidity Post Closing Forecast
Liquidity Post Closing Forecast Forecasted Cash Position $1.0B Existing Stanley Committed Credit Facilities Expiring 2013 $.8B Planned New Credit Facilities $.5B - $.75B Stanley’s Stock Purchase Contract Maturing Q2 2010 $.32B Total Near Term Liquidity $2.62B - $2.87B Ample Liquidity To Meet The Nee
Slide 23: Consistent With Stanley's Financial Objectives
Consistent With Stanley’s Financial Objectives Sales Growth Financial Performance Dividend Credit Rating Stanley’s Financial Objectives In Place Since 2004 § 3-5% Organic § ~10% Total § Mid-Teens % EPS Growth § FCF > Net Income § ROCE In The Range Of 12-15% § Continued Growth § Strong Investment Gra
Slide 24: Chairman & Chief Executive Officer, The Stanley Works
Chairman & Chief Executive Officer, The Stanley Works John F. Lundgren
Slide 25: Unique Opportunity: Combination Of Two Outstanding Companies
Unique Opportunity Combination Of Two Outstanding Companies Complementary Global Product Offerings Comprehensive Array Of Iconic Brands Enhances Core Strengths Of Each Company Creates Stronger Global Company Shared Commitment To Operational Excellence Substantial Synergy Opportunities
Slide 26: A Powerful Legacy, A Future of Growth
A POWERFUL LEGACY, A FUTURE OF GROWTH
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