The Stanley Works announced that it has filed a tender offer through a Taiwanese subsidiary to acquire approximately 67 percent of the outstanding shares of Besco Pneumatic Corporation ("Besco"), a leading manufacturer of pneumatic tools headquartered in Taichung, Taiwan with facilities in Taiwan and China, for $42 million in cash. The tender offer will remain in effect through July 24, at which time Besco is expected to terminate its listing on the Emerging Stock Market and its status as a public company. Owners of 67 percent of the outstanding shares have committed to tender their shares in response to
Stanley Fastening Systems ("Bostitch") is currently Besco's largest customer, representing just over 50 percent of Besco's annual sales, and Besco is currently one of Bostitch's largest suppliers. Besco's 2005 revenues were approximately $38 million. The acquisition is expected to be nominally accretive to earnings in 2006 after non-cash inventory step-up charges and accretive to fully-diluted earnings per share by approximately 5 to 10 cents per share in years 2007 to 2009. It also meets the company's criteria for return on capital employed.
John F. Lundgren, chairman and CEO, said: "Acquiring Besco will satisfy our key objective of owning the means of pneumatic tool production in low-cost countries. It provides an attractive cost competitive position, while protecting the intellectual property inherent in our highly engineered fastening tools. In addition, Besco's brand in Asian markets and its ample Asian manufacturing capacity will facilitate our pursuit of business in emerging markets. This is a key step in the long-term return of our fastening systems business to required levels of profitability."
The Stanley Works, an S&P 500 company, is a worldwide supplier of tools and security solutions for professional, industrial and consumer use.
