During the early-November announcement that Stanley Works will acquire Black & Decker Corp., B&D chief executive Nolan Archibald offered a flourish worthy of a wedding toast. The companies, he said, have discussed merging three times over 28 years.
And in fact, these two toolmakers -- soon to be joined in an all-stock deal valued at $4.5 billion and promising $350 million in cost savings -- do look good together. Kind of like Billy Crystal and Meg Ryan at the end of "When Harry Met Sally," the 1989 movie about another pairing that was years in the making.
Of course, the interesting part of the Harry and Sally story was everything that happened before they got together.
So what have New Britain, Conn.-based Stanley and Towson, Md.-based B&D been up to, relationship-wise, for the past 28 years? It turns out that both have long records of dealmaking -- bad, good, might have been and perhaps still to come.
Back in 1981, merger talks likely made sense for some of the same reasons they did in 2009. The U.S. was in recession, sales of B&D's power tools and Stanley's hand tools were slow and imports were taking market share.
But if consolidation was attractive, deciding who would run the company apparently proved impossible.
So the two went their separate ways. In 1984 Black & Decker, which had introduced the Dustbuster in 1979, made a big bet on toasters, coffee pots and the like, spending $300 million for the small appliance business of General Electric Co. and embarking on an ambitious rebranding of the products.
But 1985 found B&D restructuring and posting a loss. In 1986 the board removed CEO Laurence Farley and named Archibald his successor. The 42-year-old marketing and operations wiz, a former college basketball star, put B&D on a turnaround track.
Stanley in 1985 was stabilizing, its profits improved thanks to an earlier restructuring. CEO Donald Davis Jr. was expanding into tool rentals and other do-it-yourself categories, as well as industrial tools. As the decade waned, those deals, plus the 1986 purchase of National Hand Tool Corp. and a Taiwanese affiliate for $97 million, were looking smart.
In Maryland, meanwhile, B&D's Archibald was seeking a big deal amid a fevered M&A market. Having lost out in an attempt to buy American Standard Inc., he borrowed heavily to buy Emhart Corp. for $2.8 billion in 1989.
The idea was to keep the plumbing and Kwikset Locks Inc. businesses and sell off things like the golf club shaft maker. But the recession-eve timing couldn't have been worse. The next turnaround took nearly a decade.
The 1990s weren't much fun for Stanley, either. In 1991 it fended off a hostile bid from Newell Co. In 1995 there was another restructuring, and the board hit CEO Richard Ayers with a pay cut.
In 1997 the directors brought in a new CEO: John Trani, a Jack Welch lieutenant at General Electric.
Trani's big paychecks and relocation of manufacturing work overseas soon drew loud complaints from unions. His attempt to move Stanley's headquarters to Bermuda for tax reasons, abandoned in 2002, caused even more of an uproar.
But Trani also pushed Stanley into the security business with the 2002 acquisition of Best Lock Corp. Successor John Lundgren continued the drive with three other sizable deals, including the purchase of HSM Electronic Protection Services Inc. for $545 million in 2006. Today 43% of Stanley's profit comes from its fast-growing security business.
B&D, by contrast, remained more dependent on consumers -- hence its lower market cap at deal time. Along with the ages of the management teams on each side, security is why Stanley is the acquirer. Lundgren will be CEO; Archibald, 66, will be executive chairman for three years and then retire.
End of movie? Hardly. First, there's a major integration ahead. Stanley Black & Decker will also be more exposed to big-box retailers, and less focused on security, than Stanley alone was.
Lundgren says he's keener on security than ever. But analysts at Raymond James & Associates Inc., who like the deal, also think it increases the odds of a security spinoff down the road.
And you thought Harry and Sally had complicated lives.