Allegion, a global security products and solutions provider, signed a definitive agreement to acquire Stanley Access Technologies and assets related to the automatic entrance solutions business from Stanley Black & Decker for $900 million in cash. When adjusted for approximately $90 million in tax benefits, the purchase price is $810 million on a cash-free, debt-free basis. Reducing the amount paid by the tax benefits, the purchase price represents approximately 14.5x 2022E EBITDA, or approximately 12.5x including run-rate synergies.
Access Technologies is a manufacturer, installer and service provider of automatic doors in North America, primarily in the United States and Canada. Its diversified customer base centers on non-residential settings, including retail, healthcare, education, commercial offices, hospitality and government. Access Technologies generated approximately $340 million in net sales in 2021.
As a result of this acquisition, Allegion will significantly expand its breadth of access, egress and access control solutions. In addition, Allegion will have exposure to high-growth segments across a large installed base, as well as the scale and coverage to better serve its commercial and institutional customers with automatic entrance solutions and access technologies.
Allegion intends to finance the transaction through a combination of cash, borrowings under its existing revolving credit facility and new debt financing. Following the transaction, the net debt to adjusted EBITDA is expected to naturally de-lever over time, given strong liquidity and ongoing cash generation. Allegion obtained fully committed financing from Goldman Sachs to support the deal. The transaction is not subject to a financing condition.
The acquisition, which has been unanimously approved by Allegion’s board of directors, is expected to close in the third quarter of 2022, subject to regulatory approval and customary closing conditions.
Following the close of the acquisition, Allegion expects to operate the Access Technologies business as part of the Allegion Americas segment.
Goldman Sachs is serving as financial advisor to Allegion, and Kirkland & Ellis is acting as Allegion’s legal advisor.
“We are excited to add the Access Technologies business to our portfolio of solutions,” David D. Petratis, chairman, president and CEO of Allegion, said. “With this acquisition, we will expand in an adjacent market segment, ultimately providing customers and end users with a more comprehensive offering for seamless access wherever they reside, work and thrive. Combining Access Technologies’ high-quality products and services with our ability to deliver value through access will significantly expand our core business and accelerate growth. Access Technologies shares a strong track record of innovation and is a market leader in its category. We look forward to welcoming the team to the Allegion family and unlocking greater value for our customers and our shareholders.”
“Allegion has a proven record of investing in its core business and driving innovation, which will offer significant benefits for our business, employees and customers,” Brian Pertman, president and general manager at Access Technologies, said. “As a global industry leader in access technology and security, Allegion will provide our business with incredibly strong new end user, architectural and specification relationships and distribution networks, as well as additional resources to take our business to the next level. We know Allegion well and believe our shared culture of providing quality solutions to customers will accelerate our business into the future.”
