(Reuters) - Stanley Black & Decker Inc said on Wednesday it would buy a minor stake in lawnmower maker MTD Products Inc for $234 million, expanding deeper into the outdoor garden equipment market and adding to its diverse line of products.
The power tool maker has been beefing up its portfolio over the past two years after buying Newell Brands Inc’s tool business, Sears Holdings Corp’s Craftsman brand and a tool unit in Brazil.
The company said it would buy 20 percent of MTD and will have the option to buy the remaining 80 percent of the privately held firm beginning on July 1, 2021.
As part of the deal, which values MTD at about $1.17 billion, the power tool maker will name two representatives to MTD’s 11-member board of directors.
MTD, which reported more than $2 billion in revenue last year, makes lawn tractors, trimmers, chain saws, utility vehicles and other outdoor power tools.
“This investment in MTD increases our presence in the $20 billion global lawn and garden market in a financially and operationally prudent way,” Stanley Black Chief Executive Officer James Loree said in a statement.
The Connecticut-based company reported revenue of $12.75 billion last year from businesses ranging from knives and hammers to storage cabinets under its Black + Decker, Craftsman, Dewalt, and Mac Tools brands.
The company bought the Newell Brands tool business in a $1.95 billion deal in 2016 and the Craftsman brand last year for $900 million. The Craftsman deal marked its first foray into the lawn and garden equipment market.
Founded in 1932 in Cleveland, MTD makes power tool brands including Cub Cadet, Troy-Bilt, Remington, Robomow, Rover and Wolf-Garten.
The deal is expected to close in early 2019.
Reporting by Supantha Mukherjee in Bengaluru; Editing by Bernard Orr