Black & Decker pays $160 million for consumer products firm

March 02, 2006|By JAMIE SMITH HOPKINS | JAMIE SMITH HOPKINS,SUN REPORTER

Pressing into new territory, toolmaker Black & Decker Corp. said yesterday that it has bought a Fort Lauderdale, Fla., designer and marketer of jump-starters and similar consumer products for $160 million.

Towson-based Black & Decker said the privately owned Vector Products Inc. complements its line of power tools, kitchen appliances and other household items. Vector's products - which include vehicle battery chargers, power inverters and rechargeable spotlights - represent Black & Decker's first significant foray into the consumer automotive and marine markets.

Black & Decker said it licensed its brand to Vector a year ago and was impressed with the company, which had about $150 million in sales in 2005. The company, with just over 100 employees, is profitable, but Black & Decker wouldn't disclose those figures.

"These are products that we obviously thought a lot of, because we allowed our name to be put on them," said Barbara B. Lucas, a spokeswoman for Black & Decker. "We thought it was a nice fit ... and we see some opportunities to grow this business."

Vector referred all questions yesterday to its acquirer.

Black & Decker's stock price rose after the morning announcement, closing at $86.76 yesterday, up $1.18.

Nolan D. Archibald, chairman and chief executive of Black & Decker, said in a statement that the Florida company is "highly innovative" and brings new technologies to the table.

Besides a car DustBuster that it made years ago, Black & Decker has never sold consumer automotive products. It is similarly new to the marine market.

"This gives us a platform for developing more products for these types of uses," said Lucas.

Bentley Offutt, president of Offutt Securities Inc., an investment research firm in Cockeysville that follows the company, can see potential there. He said Black & Decker is launching products this spring with a new 36-volt battery that could be used in Vector's line.

"This would open up another line of products," said Offutt, whose family owns Black & Decker stock.

This was the company's first acquisition since the $775 million deal to buy Pentair Inc.'s Tools Group in 2004.

In 2003 it purchased Baldwin Hardware Corp., a provider of architectural and decorative products for homes, and Weiser Lock Corp., which makes locksets and exterior hardware.

Black & Decker paid cash for Vector. It has also been socking cash into stock - it bought back more than 6 million of its shares last year, then about 8 percent of outstanding shares - and dividend payouts. It announced last month that it would increase the quarterly dividend by about a third, to 38 cents a share.

The Vector deal should add "slightly" to earnings per share this year and 10 cents to 15 cents next year, the company said.

Offutt said Black & Decker has historically made its acquisitions profitable within the following year by increasing sales and cutting costs. Lucas said executives intend to maintain the Fort Lauderdale operation.

jamie.smith.hopkins@baltsun.com

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