Emerson (EMR) has signed an agreement to purchase the Tools and Test Equipment (Tools & Test) business of Textron (NYSE: TXT) for $810 million. Tools & Test is a leading manufacturer of electrical and utility tools, diagnostics, and test and measurement instruments with strong global distribution and highly respected brands, including Greenlee and Klauke.
The acquisition, joined with Emerson’s Ridge Tool Company, creates a global $1 billion professional tools business with the broadest offering for mechanical, electrical and plumbing contractors. Emerson expects the acquisition to be accretive to earnings in fiscal 2019 and immediately accretive to cash flow.
“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.”
Tools & Test’s longtime leadership in electrical joining paired with the RIDGID portfolio of joining technologies for mechanical and plumbing applications creates a leading position in a fast-growing segment, critical for meeting the safety and efficiency needs of the professional trades. In addition, Tools & Test brings offerings in diagnostics and other digital technologies that are an excellent fit with RIDGID. From a geographic perspective, Tools & Test’s strong presence in European markets complements the market strength of RIDGID outside of Europe, and furthers the company’s mission to be the global tool of choice for the professional contractor.
“The Tools & Test acquisition provides Emerson an outstanding opportunity to better serve our target customer – the pro,” said 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.”
Headquartered in Rockford, Ill., Tools & Test has 2,300 employees with 11 manufacturing locations around the world and 2017 sales of $470 million.
The acquisition is expected to close within the next 90 days, subject to various regulatory approvals and other customary closing conditions.