Fortune Brands Home & Security has acquired Sentry Safe, a leading manufacturer of personal safes with estimated annual sales of $150 million. The transaction closed early this week for $117.5 million and was funded from the company's existing credit facilities.
Sentry Safe will become part of Master Lock, a leading padlock brand in North America. Sentry Safe is headquartered in Rochester, New York, and has approximately 500 employees, with manufacturing facilities in Rochester, New York, and Cannelton, Indiana.
“Sentry Safe’s global brand strength in the adjacent personal safe market enables Master Lock to broaden its product offerings and leverage its iconic brand worldwide," said Fortune Brands CEO Chris Klein. “Both companies hold similar competitive advantages in their markets and produce products that protect people’s most valuable assets. I am excited about the growth opportunities we will now have together to drive innovation, leverage global distribution and expand channels.”
News of the acquisition coincided with the company’s second-quarter results. Fortune Brand posted reported sales of $1.14 billion, an increase of 10% over the second quarter of 2013.
“Our teams executed well, delivering a solid second quarter as consumer traffic is increasing and demand gradually improved from the soft start to the year,” said Klein. “We continue to gain share and remain on track to deliver strong growth this year.”
Kitchen and bath cabinetry sales were up 19%, fueled by strong increases in the dealer channel from continued share gains and strength in repair and remodel volume and mix. Plumbing and accessories sales increased 5%, led by growth in the U.S. wholesale channel and international. Advanced material windows and door systems sales were up 9%. Entry doors sales were up 11% and windows sales were up 7% from the prior year.
Security and storage sales decreased 5%. Within the segment, security sales increased 1% and tool storage sales decreased 21%.
The company’s 2014 annual outlook is based on a U.S. home products market growth assumption of 6 to 8%. Based on the company’s expectation to continue outperforming the market and the benefit from the Sentry Safe acquisition, the company expects full-year 2014 net sales to increase 9 to 11%.
“We have seen a gradual improvement in the pace of new construction and consumer spending,” said Klein. “However, our updated 2014 annual outlook for the home products market now reflects less growth in the second half of 2014 than we last estimated. Still, we remain on track to deliver strong growth this year and are well-positioned for accelerating growth in 2015.”