Black & Decker 2014 Annual Report Download - page 17

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FORM 10-K
PART I
ITEM 1. BUSINESS
General
Stanley Black & Decker, Inc. ("the Company") was founded in 1843 by Fredrick T. Stanley and incorporated in Connecticut in
1852. In March 2010, the Company completed a merger ("the Merger") with The Black & Decker Corporation (“Black &
Decker”), a company founded by S. Duncan Black and Alonzo G. Decker and incorporated in Maryland in 1910. At that time,
the Company changed its name from The Stanley Works ("Stanley") to Stanley Black & Decker, Inc. The Company is a
diversified global provider of power and hand tools, products and services for various industrial applications, mechanical
access solutions (i.e. automatic doors and commercial locking systems), and electronic security and monitoring systems with
2014 consolidated annual revenues of $11.3 billion. The Company is continuing to pursue a growth and acquisition strategy
that involves industry, geographic and customer diversification to foster sustainable revenue, earnings and cash flow growth.
The Company has developed key growth platforms within the Industrial and Security segments through acquisitions.
Furthermore, two aspects of the Company's vision are to be a consolidator within the tool industry and to increase its presence
in emerging markets, with a goal of ultimately generating greater than 20% of annual revenues from emerging markets. The
Company has made investments in its organic growth initiatives in order to drive growth across all of its businesses, and
anticipates the majority of acquisition-related investments being within the growth platforms previously mentioned. During
2013, the Company elected to place a moratorium on acquisitions to focus on its near-term priorities of operational
improvement, deleveraging through improved credit metrics and returning capital to shareholders. The Company expects to
resume acquisition activity in the second half of 2015 at the earliest. In 2014, approximately 49% of the Company’s annual
revenues were generated in the United States, with the remainder largely from Europe (25%), emerging markets (17%) and
Canada (5%).
Execution of the Company's strategy has resulted in approximately $6.2 billion of acquisitions since 2002 (excluding the Black
& Decker merger) and increased brand investment, enabled by cash flow generation and increased debt capacity. The
acquisition of Infastech for $826.4 million in February 2013, a 60% controlling share in Jiangsu Guoqiang Tools Co., Ltd.
("GQ") for a total purchase price of $48.5 million in May 2013, and the 2011 acquisition of Niscayah Group AB (“Niscayah”)
for a total purchase price of $984.5 million exemplify this strategy. Infastech is a global manufacturer and distributor of
specialty engineered fastening technology based in Hong Kong. The acquisition of Infastech adds to the Company's strong
positioning in specialty engineered fastening, an industry with solid growth prospects particularly in the global electronics,
industrial and automotive end markets, and has helped further expand the Company's global footprint with its strong
concentration in fast-growing emerging markets. GQ is the #3 mid price point power tool manufacturer in China and
complements the Company's existing power tools product offerings in the CDIY segment. Niscayah is one of the largest access
control and surveillance solutions providers in Europe. The Niscayah acquisition expanded and complemented the Company's
existing electronic security offerings and further diversifies the Company's operations and international presence. In addition to
these acquisitions, in December 2012, the Company sold its Hardware & Home Improvement business ("HHI"), including the
residential portion of Tong Lung, to Spectrum Brands Holdings, Inc. ("Spectrum") for approximately $1.4 billion in cash. The
purchase and sale agreement stipulated that the sale occur in a First and Second Closing. The First Closing, which excluded the
residential portion of the Tong Lung business, occurred on December 17, 2012 while the Second Closing, in which the
residential portion of the Tong Lung business was sold, occurred on April 8, 2013. The Company also divested several smaller
businesses in recent years that did not fit into its long-term strategic objectives. The operating results of these divested
businesses have been reported as discontinued operations in the Consolidated Financial Statements. Refer to Note E,
Acquisitions, and Note T, Discontinued Operations, of the Notes to Consolidated Financial Statements in Item 8 for further
discussion.
At January 3, 2015, the Company employed approximately 50,400 people worldwide. The Company’s principal executive
office is located at 1000 Stanley Drive, New Britain, Connecticut 06053 and its telephone number is [phone].