Black & Decker Corp. said yesterday that it has agreed to sell its household products business in the Western Hemisphere to Windmere Durable Holdings Inc. for $315 million.
The sale includes items like Black & Decker's Spacemaker appliances and Toast-R-Ovens, but excludes its lighting and cleaning lines, including the Towson-based company's Dustbuster and SnakeLight lines.
"We are undergoing a strategic repositioning of the company that entails focusing on our core businesses, while divesting what we consider to be nonstrategic ones," said Black & Decker spokeswoman Barbara Lucas.
Black & Decker put its struggling household products business up for sale in January, when it also announced the restructuring that would eliminate 3,000 jobs company-wide in a cost-cutting plan intended to boost profits. That plan includes streamlining the core businesses -- power tools, Price Pfister plumbing products, a range of lock-set brands, and fastening and assembly systems -- to save $100 million annually and to buy back 10 percent of the company's outstanding shares over two years, Lucas said.
The divestiture portion of the plan also involves selling the company's glass container-making machinery and True Temper golf club shaft businesses.
Both businesses are being looked at by potential buyers, Lucas said. Bids are expected for the golf shaft business in a few weeks and on the glass container-making machinery business by summer, she said.
Black & Decker said in January that it expected to net more than $500 million from the divestitures. The $315 million price for the household products division "puts us well on the way of achieving that," Lucas said.
Black & Decker said it plans to hold on to its household products operation in Europe, where the Dustbuster generates strong sales. The company also will retain its lighting and cleaning lines, because they fit well with its core business and they are still profitable, Lucas said.
The deal will allow Windmere, the Miami Lakes, Fla.-based maker of hair dryers and other appliances and grooming aids, to sell the household products -- except in Brazil -- under the Black & Decker name for 6 1/2 years without paying royalties. The licensing is subject to renewal if both companies agree, Windmere said.
"Black & Decker is by far the most powerful brand in the small xTC appliance industry," said David Friedson, Windmere's chairman, chief executive and president. "This is basically the culmination of a search on our behalf of more than two years for a high profile brand."
Black & Decker's household products division employs about 3,500 people worldwide. At this point, no significant job cuts are planned, Friedson said.
The division's entire management team is expected to remain after the sale and the business will remain in Shelton, Conn.
Windmere said the products being acquired had sales last year of about $400 million, and are expected to boost its annual sales to about $750 million. Last year, Windmere earned about $20 million, or $1 a share, on sales of $262 million.
Last month, Black & Decker reported a first-quarter loss of $971.4 million after charges of about $1 billion. Excluding the charges, profit rose 23 percent to $32.4 million, or 33 cents a share, on sales of $1.01 billion.
Shares of Black & Decker closed yesterday at $53.5625, up 18.75 cents, before the company announced the sale. Shares of Windmere closed at $29.375, unchanged.
Pub Date: 5/12/98