Shares of Stanley Black & Decker (NYSE:SWK) are trending higher today in pre-market trading after the tools and outdoor products major agreed to sell its attachment and handheld hydraulic tools unit, STANLEY Infrastructure, to Epiroc AB (OTC:EPOKY) for $760 million.
With this strategic M&A transaction, SWK aims to focus on opportunities in its core businesses and support its capital allocation priorities. The company anticipates a pre-tax, non-cash charge of about $100 million to $150 million in association with the write-down of its STANLEY Infrastructure net assets.
For Fiscal Year 2023, the unit is expected to achieve revenue of $450 million to $470 million. Its adjusted operating margin for the year is anticipated in the mid-to-high teens.
Further, the company plans to utilize to funds raised to lessen its debt. According to its most recent filing, SWK’s total debt stood at over $7.5 billion. The transaction remains subject to regulatory approval and closing conditions.
What is the Future of SWK Stock?
Overall, the Street has a Hold consensus rating on Stanley Black & Decker. Following a nearly 15% jump in the company’s share price over the past month, the average SWK price target of $95.56 implies downside potential of 5.8% in the stock.
