Spectrum Brands Holdings Inc., the Madison, Wisconsin-headquartered American lock maker had issued a statement on Wednesday saying that the diversified Fortune 500 company having had over 17,000 employees, would sell off its home improvement division to Sweden’s Assa Abloy in an all-cash $4.3 billion divestiture deal.
On top of that, shares’ prices of Spectrum Brands jumped as much as 20 per cent after the company had said in a statement that it would capitalize on the upsum raised through the divestiture deal to downsize debt-loads and to make necessary acquisitions, however, Spectrum Brands rounded off the day 17.79 per cent higher to $93.08 per share.
Aside from that, followed by the announcement, Spectrum Brands Holdings Inc Chief Executive David Maura was quoted saying to the reporters that a slimmer entity would have higher profit margins and a stronger growth rate, while the Spectrum’s latest divestiture deal would allow it to centre its focus more on core businesses like of pet care, home and personal care units alongside home and gardening equipment among others.
Spectrum Brands to divest home improvement unit to Swedish Assa Abloy
Concomitantly, when it came to Assa Abloy’s interest in the buyout deal, several analysts were quoted saying that the deal would help the Swedish company to stretch out its commercial businesses into residential spaces in Northern America, since the deal would include a swathe of Spectrum’s home improvement retail labels ranging from Lake Forest to Californian home improvement division houses brands such as Baldwin, Kwikset and Weiser.
Aside from that, an all-cash $4.3 billion divestiture of Spectrum’s home improvement unit to Assa Abloy seems to be a win-win scenario for both parties, as demands of home improvement goods have still been soaring despite an ease of pandemic restrictions, while net sales of Spectrum’s hardware and home improvement unit soared as much as 48.8 per cent over its latest quarter of fiscal 2021 that ended on July 4, compared to the same time a year earlier.