Stanley Works Tenders Offer To Acquire 67% of Besco Pneumatic Corporation Shares For $42 Million

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Stanley Works Tenders Offer To Acquire 67% of Besco Pneumatic Corporation Shares For $42 Million
    NEW BRITAIN, Conn., July 13 /PRNewswire-FirstCall/ -- The Stanley Works
(NYSE: SWK) announced that it has filed a tender offer through a Taiwanese
subsidiary to acquire approximately 67% of the outstanding shares of Besco
Pneumatic Corporation ("Besco"), a leading manufacturer of pneumatic tools
headquartered in Taichung, Taiwan with facilities in Taiwan and China, for
$42 million in cash. The tender offer will remain in effect through July
24, at which time Besco is expected to terminate its listing on the
Emerging Stock Market and its status as a public company. Owners of 67% of
the outstanding shares have committed to tender their shares in response to
Stanley's offer and, accordingly, the transaction is expected to close on
July 31. The Stanley Works also indicated it will have the option to
acquire an additional 15% of outstanding shares over a five-year period.
    Stanley Fastening Systems ("Bostitch") is currently Besco's largest
customer, representing just over 50% of Besco's annual sales, and Besco is
currently one of Bostitch's largest suppliers. Besco's 2005 revenues were
approximately $38 million. The acquisition is expected to be nominally
accretive to earnings in 2006 after non-cash inventory step-up charges and
accretive to fully-diluted earnings per share by approximately 5-10¢ per
share in years 2007-2009. It also meets the company's criteria for return
on capital employed.
    John F. Lundgren, Chairman and Chief Executive Officer, commented:
"Acquiring Besco will satisfy our key objective of owning the means of
pneumatic tool production in low-cost countries. It provides an attractive
cost competitive position, while protecting the intellectual property
inherent in our highly engineered fastening tools. In addition, Besco's
brand in Asian markets and its ample Asian manufacturing capacity will
facilitate our pursuit of business in emerging markets. This is a key step
in the long-term return of our fastening systems business to required
levels of profitability."
    The Stanley Works, an S&P 500 company, is a worldwide supplier of tools
and security solutions for professional, industrial and consumer use.
    The Stanley Works corporate press releases are available in the
Investor Relations section of the company's Internet web site at
http://www.stanleyworks.com.
                             CAUTIONARY STATEMENT
          Under the Private Securities Litigation Reform Act of 1995
    Statements in this press release, including those regarding the
expectation that the acquisition will be nominally accretive to earnings in
2006 after non-cash inventory step-up charges and accretive to fully
diluted earnings per share by approximately 5-10 cents per share in 2007 -
2009 (the "Results") are "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements are based on current expectations and involve inherent risks and
uncertainties, including factors listed below and other factors that could
delay, divert, or change any of them, and could cause actual outcomes and
results to differ materially from current expectations.
    The company's ability to consummate the proposed transaction and to
deliver the Results is dependent upon, among other things, (i) the ability
of the company to achieve the synergies anticipated as a result of the
acquisition and limit acquisition-related costs and expenses within
expected ranges; (ii) the success of the company's efforts to maintain
prices in order to, among other things, offset the impact of steel and
other commodity price inflation; (iii) continued improvements in
productivity and cost reductions; and (iv) the absence or mitigation of
increased pricing pressures from customers and competitors and the ability
to defend market share in the face of price competition.
    The company's ability to achieve the Results will also be affected by
external factors including pricing pressure and other changes within
competitive markets, the continued consolidation of customers particularly
in consumer channels, inventory management pressures on the company's
customers, increasing competition, changes in trade, monetary, tax and
fiscal policies and laws, inflation, currency exchange fluctuations, the
impact of dollar/foreign currency exchange and interest rates on the
competitiveness of products and the company's debt program, the strength of
the U.S. economy and the impact of events that cause or may cause
disruption in the company's installation, distribution and sales networks
such as weather conditions, war, terrorist activities, political unrest and
recessionary or expansive trends in the economies of the world in which the
company operates.
    The company undertakes no obligation to publicly update or revise any
forward-looking statements to reflect events or circumstances that may
arise after the date hereof.
SOURCE The Stanley Works
http://www.StanleyWorks.com
http://www.prnewswire.com/comp/874363.html /
CONTACT:
Gerry Gould, VP - Investor Relations, The
Stanley Works, +1-860-827-3833, ggould@stanleyworks.com