Danaher and Cooper to merge tool businesses

Danaher Corporation and Cooper Industries plc announced they have reached an agreement to combine their respective tool businesses, Danaher Tool Group and Cooper Tools, in a joint venture.

Cooper and Danaher will each hold a 50 percent ownership stake in the new joint venture and Danaher Tool Group executive Steve Breitzka will lead the new company as its president and chief executive officer. The company will be headquartered in Sparks, Md., and its board of directors will consist of six members with three members appointed by each of the parent companies. The leadership team will include both Cooper Tools and Danaher Tool Group executives. The transaction is subject to customary closing conditions and is expected to close after securing the necessary regulatory approvals.

The 2009 sales of the two tools businesses on a combined, non-GAAP basis were approximately $1.2 billion. As a result of the transaction, the new company is expected to make a dividend payment of $90 million to Danaher.

To be named in the coming weeks, the combined company will market some of the leading brands in the tool industry, such as Allen, Apex, Armstrong Tools, Campbell, Cleco, Crescent, Erem, GearWrench, H.K. Porter, Jacobs Chuck, Jobox, K-D Tools, Lufkin, Nicholson, Plumb, Sata, Weller and Wiss, among others.

The combined company will bring together two major manufacturers with complementary product offerings, distribution channels and geographic reach. Together, the combined company will provide a broader array of hand and power tools to a more diverse range of end users in the do-it-yourself, manufacturing and assembly, automotive, construction, and electrical trades.

For example, professional operators, mechanics and technicians in manufacturing production, assembly and maintenance organizations will have more product choice through national and independent distribution partners. The company will also sell its products to consumers through established partnerships with major global retailers. This includes private-label products and the companies' owns brands.

"Combining the strengths of each company is expected to translate into significant benefits for our collective customers across the globe," said Breitzka. "In addition to offering a wider and deeper line-up of leading tool brands, we expect to be better positioned to drive new product innovation - a hallmark of both businesses - with shared engineering resources."

"World-class quality, service and innovation are becoming increasingly important to our distributors and end users," said Laura Ulz, who currently serves as the president of Cooper Tools. "Size and scale are important in this industry and this combination will create a focused, global tools business with an improved ability to continue to meet the evolving needs of our professional and retail customers."

The companies expect that customers will be able to continue to purchase products and receive customer service through the existing channels.