Fortune Brands Home & Security announced it has entered into a definitive agreement to acquire the Emtek and Schaub premium and luxury door and cabinet hardware business, and the U.S. and Canadian Yale and August residential smart home locks business from ASSA ABLOY.
The all-cash deal is said to be $800 million, or approximately $700 million net of tax benefits.
Fortune Brands (NYSE: FBHS) is based in Deerfield, Ill. The company operates three business segments: Water Innovations, Outdoors & Security, and Cabinets. The company’s portfolio of complementary businesses and brands includes Moen and the House of Rohl within Water Innovations; outdoor living and security products from Therma-Tru, LARSON, Fiberon, Master Lock and SentrySafe; and MasterBrand Cabinets’ wide-ranging offerings from MANTRA, Diamond, Omega and many more.
“This Acquisition is perfectly aligned to our strategy as a brand, innovation and channel leader,” said Fortune Brands CEO Nicholas Fink. “Yale and August will bring two great brands and significant engineering expertise into our already powerful security portfolio. Emtek and Schaub allow us to enter a branded, growing and highly profitable category in a leadership position, where we can accelerate innovation and leverage our channel and consumer insights to create significant value over time.”
Fink added, “Together with our existing iconic brands, loyal channel relationships, and supply chain expertise, we believe these additions will result in enhanced, innovative products for consumers and customers. We can accelerate growth and profitability by deploying our Fortune Brands Advantage capabilities to create value for all stakeholders.”
With revenues of approximately $350 million in 2021, the acquired business is comprised of leadership brands in the fast-growing smart lock and the highly profitable and growing premium and luxury hardware categories. Fortune Brands expects to add meaningful growth and cost synergies to the business over time.
Fortune Brands expects to receive tax benefits over a 15-year period with a net present value of approximately $100 million, and the net purchase price of $700 million equates to approximately 7.8x estimated 2022 adjusted EBITDA for the Business before synergies.
The acquisition is conditioned on the successful closing of the acquisition by ASSA ABLOY from Spectrum Brands of its Hardware and Home Improvement business following a favorable resolution of the court proceedings with the Department of Justice.
The acquisition is expected to close in the second quarter of 2023.
