Stanley Black & Decker shares jumped 3 percent Wednesday after the power tool maker said it’s buying Newell Brands’ tools division for $1.95 billion in cash.
The unit includes the industrial cutting, hand tool and power tool accessory brands Irwin and Lenox.
Atlanta-based Newell Brands announced recently that it wanted to sell several divisions as part of a consolidation to sharpen its portfolio. It will consolidate its existing 32 business units into 16 operating divisions. This is Stanley Black & Decker’s first major acquisition since 2013. The buyout is expected to add approximately 15 cents per share to earnings in the first year after the deal closes, rising to about 50 cents per share by the third year. New Britain, Connecticut-based Stanley is also eyeing cost savings of about $80 million to $90 million by the third year after closing the purchase, expected in the first half of 2017.