Emerson (NYSE: EMR) says it has inked an agreement to Textron's (NYSE: TXT) Tools and Test Equipment (Tools & Test) business. The potential $810 million deal would see the transfer of Greenlee, which supplies tools and other equipment for communications network deployment and troubleshooting, as well as fellow brand Klauke.
The Tools & Test business employs 2,300 people across 11 manufacturing locations around the world. Sales in 2017 totaled $470 million.
For Emerson, the deal will expand the footprint its Ridge Tool Co. currently serves to create a $1 billion professional tools business to serve the needs of mechanical, electrical, and plumbing contractors. The new assets will be accretive to earnings in fiscal 2019 and immediately accretive to cash flow, Emerson expects. The deal should close within 90 days and is subject to the usual approvals and closing conditions.
"This acquisition significantly contributes to Emerson's investment strategy of adding complementary businesses that broaden our served markets and add key capabilities to meet the evolving needs of our customers and drive premium growth," said Emerson Chairman and Chief Executive Officer David N. Farr. "The strong strategic fit with Ridge Tool provides a meaningful value creation opportunity for Emerson."
"The Tools & Test acquisition provides Emerson an outstanding opportunity to better serve our target customer – the pro," added Robert T. Sharp, Executive President, Emerson Commercial & Residential Solutions. "The addition of Greenlee and Klauke complements our iconic RIDGID brand, creates a leading technology portfolio, expands our geographic presence and strengthens our position in the growing global professional tools marketplace. I look forward to personally welcoming the Tools & Test employees into Emerson."
Besides a variety of tools for electrical applications, Greenlee offers tools for cable termination as well as test instruments for communication network applications (see, for example, "Greenlee upgrades DataScout test system" and "Greenlee Communications launches FI-100 fiber identifier"). The unit also offered fiber splicing equipment and distributed Sherman + Reilly fiber installation systems (see "Greenlee Communications, Sherman+Reilly offer fiber drop cable installation system").
Klauke supplies joining tools such as crimp and press tools.
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