In a move that came as a surprise to many industry observers, ASSA ABLOY has announced that it has entered into an agreement to purchase the Hardware and Home Improvement (HHI) division of Spectrum Brands for $4.3 billion. The acquisition would bring brands such as Kwikset, Baldwin, Weiser and National Hardware under the corporate umbrella of ASSA ABLOY. The deal also would include Pfister, a maker of consumer plumbing fixtures and accessories.
In a statement, ASSA ABLOY said the acquisition is a “strategically important step” in developing its residential business in North America while also supplementing the company’s “reputation for innovation” on the commercial side. “This acquisition advances our strategy to strengthen our position by adding complementary products to the core business,” Nico Delvaux, president and CEO of ASSA ABLOY, said in the statement. “It will further accelerate the transformation from mechanical to digital solutions.”
“Our technology platform and innovation focus supplements HHI’s current offerings and provides an exciting opportunity for us to deliver superior value to consumers,” added Lucas Boselli, executive vice president of ASSA ABLOY and head of the Americas Division.
For its part, Spectrum Brands said divesting of the HHI division would enable it to focus its business around its three remaining business units, including Global Pet Care, Home & Garden and Home and Personal Care. “I am confident that ASSA ABLOY will take (HHI) to its highest potential,” said David Maura, CEO of Spectrum Brands. “After the closing, we will become a more pure-play consumer staples company.”
Headquartered in Lake Forest, Calif., HHI employs about 7,500 people worldwide and has manufacturing facilities in the United States, Mexico, Taiwan, China and the Philippines. For the fiscal year ending September 2020, HHI’s net sales were $1.3 billion with an adjusted EBITDA margin of around 19%.
Analysts say the combination of Kwikset and Baldwin with ASSA ABLOY’s existing consumer-focused product lines, such as those from Yale and August Home, would create a residential access control juggernaut.
“The acquisition of Spectrum Brands’ Hardware and Home Improvement division by ASSA ABLOY brings together the two leading door lock makers, in terms of market share, in the smart-home industry,” says Patrice Samuels, senior analyst at market research firm Parks Associates. “The collaboration between these teams should drive high innovation and better user experiences in the smart-door-lock industry and give ASSA ABLOY greater influence in setting industry standards.”
