Madison, Wis.-based Spectrum, which is controlled by hedge fund Harbinger Group Inc., said it would buy the hardware and home improvement group, or HHI, put on the block by Stanley earlier this year. The assets to be acquired generated Ebitda of $188 million on sales of $985 million in the twelve months ending June 30 from brands including Baldwin knobs, Kwikset locks and Price Pfister faucets.

The deal also includes certain assets of Tong Lung Metal Industry Co. Ltd., a Taiwanese manufacturer of locksets with facilities in Taiwan and the Philippines. Spectrum has received financing commitments from Deutsche Bank AG and Barclays Capital Inc. to finance the transaction.

Spectrum in a statement said that the purchase would contribute to earnings per share immediately, boosting the company's total sales to over $4 billion per year and adding market-leading brands to its expansive portfolio.

"The scale and expanded product offering we gain will further balance our sales profile and provide exciting cross-selling opportunities from expanding sales of Spectrum Brands' products to major U.S. home improvement centers and increasing HHI sales to leading global mass merchants and other Spectrum Brands' retailers," company CEO Dave Lumley said in a statement. "HHI will also give us an additional platform for global growth using our existing international infrastructure, as well as entry into the growing market of integrated residential security, fire and lighting solutions."

HHI generated about 85% of its revenue from North America, according to Spectrum, with more than 40% coming from sales at U.S. home improvement stores.

David Maura, executive vice president of Harbinger and chair of Spectrum's board, in a statement said "the addition of HHI is consistent with our strategy and we are confident that we are acquiring the business at an attractive entry point and that the benefits of our increased scale, diversity, margins and free cash flow generation will accrue to our shareholders over time."

Harbinger owns about 57% of Spectrum's shares.

Stanley Black & Decker disclosed in July it was seeking buyers for the assets, retaining Goldman Sachs Group Inc. to conduct an auction. The New Britain, Conn.-based company, the product of Stanley Works' 2010 purchase of Black & Decker Corp. for $4.5 billion, has been focused on growing its security and specialty fasteners businesses and decided the consumer products unit was expendable.

Most of the units that make up HHI were acquired by Black & Decker in the late 1980s.

Stanley Black & Decker in a statement said that it would use the estimated $1.3 billion in after-tax cash proceeds from the deal for share repurchases, to pay down debt, and to fund its $850 million deal to acquire Infastech Ltd., announced July 23.

"The sale of HHI is consistent with our strategy of strengthening our position as a diversified industrial company while maintaining the significant upside potential of a housing market recovery through our $5 billion [construction and do it yourself] portfolio," CEO John F. Lundgren said. "While HHI is a healthy and profitable business, its characteristics are inconsistent with Stanley Black & Decker's strategic objectives of diversifying our revenue base through further expansion into targeted end markets with higher growth and margin profiles, including emerging markets."

Deutsche Bank's Marco Habert, Joseph DiMondi and Mike Stanchina were Spectrum's lead financial advisers, with James Ben and PJ Moses of Barclays Capital also advising.

A Paul, Weiss, Rifkind, Wharton & Garrison LLP team of Paul Ginsberg, Jeff Marell, Eric Goodison, Ray Russo and Daniel Mun served as legal counsel to Spectrum.