| Item 1.01. |
Entry into a Material Definitive Agreement.
|
On April 22, 2022, Allegion US Holding Company Inc., a
subsidiary of Allegion plc (such subsidiary, the “Company”) entered
into a Transaction Agreement (the “Transaction Agreement) with
Stanley Black & Decker, Inc., a Connecticut corporation
(“Stanley Parent”), Stanley Black & Decker Canada
Corporation, an unlimited liability company incorporated under the
laws of the province of Nova Scotia, various other selling entities
and Stanley Access Technologies LLC, a Delaware limited liability
company (“Stanley”), pursuant to which the Company will acquire the
automatic door business, operations and assets owned by Stanley
Parent and its affiliates (the “Transaction”), including Stanley
(the “Business”). Stanley is a leading manufacturer, installer and
service provider of automatic doors in North America, primarily in
the United States and Canada.
Pursuant to the Transaction Agreement, the Company agreed to
purchase the Business for an aggregate initial purchase price of
$900 million and assume certain liabilities in connection with
the Transaction Agreement, subject to certain adjustments for cash,
indebtedness, and normalized working capital. In connection with
the Transaction, Stanley Parent will and will cause its affiliates
to sell, assign, transfer, convey and deliver to the Company all
right, title and interest in and to the assets, properties and
rights primarily used or primarily held for use in connection with
the Business.
The Transaction Agreement contains customary representations and
warranties of a transaction of this type that the parties made to,
and are solely for the benefit of, each other. Each party has
agreed to customary covenants, including, among others, covenants
relating to: (i) the conduct of Stanley’s businesses during
the interim period between the execution of the Transaction
Agreement and the completion of the Transaction,
(ii) Stanley’s obligation to afford the Company reasonable
access to the properties, offices, plants and other facilities,
books and records of Stanley and the Business for any reasonable
purpose related to the Transaction, (iii) compliance with any
confidentiality agreements entered into in connection with the
Transaction, (iv) the continuation of certain indemnification
provisions agreed in connection with certain Stanley personnel,
(v) restrictive covenants relating to Stanley and Stanley
Parent’s ability to transact Business in the United States, Canada
or any other country in which any other selling party conducts the
Business, and (vi) Stanley and Stanley Parent’s obligation to
use commercially reasonable efforts to provide such cooperation as
is customarily provided in connection with arranging and obtaining,
and satisfying the conditions to the availability of, any debt
financing undertaken by the Company.
The Transaction Agreement is included with this filing only to
provide investors with information regarding the terms of the
Transaction Agreement, and not to provide investors with any other
factual information regarding the Company or Stanley, their
respective affiliates or their respective businesses. Investors and
security holders should not rely on the representations and
warranties as characterizations of the actual facts because they
were made only as of the date of the Transaction Agreement.
Moreover, information concerning the subject matter of such
representations and warranties may change after the date of the
Transaction Agreement, which subsequent information may or may not
be fully reflected in public disclosures.
The Transaction is expected to close in the third quarter of 2022,
subject to regulatory approval and customary closing conditions.
The foregoing description of the Transaction Agreement does not
purport to be complete and is qualified in its entirety by
reference to the Transaction Agreement filed as Exhibit 10.1 to
this Current Report on Form 8-K, which is incorporated herein by
reference.
Additionally, in connection with the Transaction, the Company
entered into a commitment letter with Goldman Sachs Banks USA
(“Goldman Sachs”), pursuant to which Goldman Sachs committed to
provide a $900 million senior unsecured bridge term loan
facility (the “Bridge Facility”). Upon the closing of the
Transaction, the Company and certain of its affiliates may enter
into a credit agreement in the terms substantially consistent with
the Bridge Facility.
