Test Rite Group Transfers Ownership in Tung Lung to Stanley Black & Decker

Taipei, May 24, 2012 (CENS)--The Taiwan-based Test Rite Group, the operator of B&Q, a globally known wholesaler of home improvement products, has decided to transfer its ownership in Tung Lung Metal Industry Co. to the world's largest tool branding vendor, Stanley Black & Decker, through a NT$3.695 billion buyout.

With a 68.35% stake owned by Test Rite Group, Tung Lung is one of Taiwan's leading kitchen fitting makers, as well as the largest lock producer in Asia, which finished 2011 with annual revenue of NT$3.169 billion and EPS (earnings per share) of NT$1.69.

Tung Lung is obviously a robust profit contributor, as Test Rite Group, which reinvested NT$2.178 billion in this lock maker to get the majority stake in late 2006, raked in over NT$909 million in turnovers listed from the reinvestment in 2007 through 2011, representing a ROI (return on investment) of over 40%. The profitability perhaps gives Stanley Black & Decker a good reason to acquire the company.

In fact, industry insiders emphasized, it is unsurprised to see the world's largest tool branding vendor launch the acquisition, given the fact that the U.S. brand vendor has shown interest in setting up a production plant of locks in the region since two years ago.

Meanwhile, Tony Ho, chairman of Test Rite Group, also admitted that the group decides to sell its Tung-Lung ownership mainly to avoid direct competition against the U.S. brand vendor in the segment for locks, considering that Stanley Black & Decker has been Tung Lung's largest single customer.

From another viewpoint, Ho continued, Stanley Black & Decker will pay a buyout price of NT$3.695 billion for the ownership in Tung Lung, or NT$42.85 for each share acquired, higher than Tung Lung's listed share price on the Taiwan stock exchange market, reflecting some credit deserved to this high-profile lock maker.