In a continuing effort to reduce its debt, Black & Decker Corp. has reached an agreement to sell its North American Mallory Controls business for approximately $90 million in cash.
The sale of the unit to Emerson Electric Co. is expected to close next month.
Towson-based Black & Decker also said in a statement yesterday that its fourth-quarter earnings are likely to be below earlier projections.
"However, we still expect to report a solidly profitable quarter versus the loss in the December quarter a year ago," said Nolan D. Archibald, chairman and chief executive officer of the power tools maker.
Black & Decker acquired the controls business in 1989 as part of its acquisition of Emhart Corp. The Brazilian portion of that business is being offered for sale separately.
"With this transaction and the pending Garden America sale, we will have divested eight non-strategic businesses and raised approximately $800 million toward our $1 billion near-term debt reduction target," he said.
Black & Decker said business conditions in Brazil have deteriorated and that U.S. sales have been below expectations in the fourth quarter.
"While we expect to offset most of the sluggishness in the U.S. through aggressive cost containment programs, the difficulties in Brazil will result in lower-than-expected earnings in the fourth quarter," Archibald said. Archibald said the company is anticipating that results for its Brazilian operations will be approximately 20 cents-a-share below previous estimates.
He said the company is implementing major cost reductions in all of its operations in Brazil and is closing its export operations there.