I have learned that Stanley Black & Decker has acquired Waterloo Industries, and have confirmed that the purchase took place in July of 2017.
Technically, this means that a new Lenox tool storage cabinet, released last Fall and shown above, was manufactured by Stanley Black & Decker in the USA.
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A few weeks ago, a ToolGuyd reader replied to our Tool Brands: Who Owns What? post, offering a few updates. They wrote: Waterloo Tool boxes were purchased by Stanley Black & Decker. After a brief search failed to turn up any relevant acquisition news or releases to corroborate the claim, I quickly dismissed it. I considered that perhaps the commenter was mistaken.
Last night, I was listening to an audio replay of Stanley Black & Decker’s Q4 2017 earnings call (available here), which took place on 1/24/2018, and at around the 39:18 to 39:30 mark, there is a brief but unmistakable mention of SBD acquiring Waterloo.
Although Stanley Black & Decker purchased Waterloo Industries six months ago, surprisingly few details have been made public. When a publicly-held company purchases another company, even a privately-held business such as Waterloo, there are typically public filings, press releases, and announcements.
I have come across documents and transcripts related to a US International Trade Commission investigation, in which Jason Stremmel, Global Metal Storage Operations Leader at Stanley Black & Decker, discussed the acquisition.
In one of the more complete transcripts that I have read, there is some interesting discussion about why Stanley Black & Decker purchased Waterloo. At its simplest, the acquisition can be explained by Stanley Black & Decker looking to quickly establish a USA manufacturing capability for retail-focused metal tool storage products.
Stanley Black & Decker has large and successful industrial tool storage capabilities, tied to their Vidmar, Lista, Proto, and Mac brands.
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Waterloo has been a strong Craftsman brand partner, manufacturing many metal tool storage products for Sears over the years.
If you recall, Stanley Black & Decker purchased the Craftsman brand from Sears, and have also pledged to bring much Craftsman tool production back to the USA.
Stanley Black & Decker has made several other announcements recently, such as finding retail partnership support at Ace Hardware, Lowes, and Amazon, covering hardware, home center, and online retail channels.
They have also discussed the scale of what they’re currently doing ahead of launching the first new Craftsman tools and products. The capacity to design and then manufacture all of the new SKUs that are being planned will require immense production capacity, with demand expected to exceed supply for quite some time.
Acquiring and potentially investing in Waterloo Industries should give Stanley Black & Decker and the new Craftsman brand greater control and flexibility in how they produce metal tool storage products for the retail market, and without relying as much on outside partners.
I think that this could also allow for more innovations and a faster response to changing market trends and customer preferences.
We have seen very compelling well-featured and aggressively-priced tool storage products from Milwaukee Tool, Home Depot’s Husky brand, and even Lowe’s Kobalt brand. Recently, Kobalt came out with a wall-mounted charging station that seems to have been quite popular.
Milwaukee, Husky, and Kobalt, among other brands, have been releasing new tool storage products at a surprisingly fast rate.
Craftsman and Sears were leaders in the metal tool storage retail market, a position they might have lost in recent years due to Sears’ decline. It is likely that Stanley Black & Decker aims to restore Craftsman’s market share, a task that could be easier thanks to the Waterloo acquisition.
I am very eager to see what Stanley Black & Decker has in store for Craftsman, Waterloo, Irwin, and Lenox, all brands and businesses they have acquired in recent years.
Although Stanley Black & Decker has been unexpectedly quiet about their acquisition of Waterloo Industries, they have not been idle. We have already seen one new metal tool storage product, the Lenox rolling workbench released for the 2017 winter holiday shopping season, and are almost guaranteed to see another new product as Father’s Day 2018 approaches.
Will we see Waterloo-made tool storage products from other SBD brands, such as Irwin? Dewalt? It seems that the primary intent is to maintain the strong connection between Waterloo and Craftsman. But with metal tool storage products, it seems to be quite easy to modify configurations, colors, badges, and certain features to produce similar but distinct-enough products.
A quick search online shows there to be Stanley Black & Decker job openings in Sedalia, Missouri, where Waterloo Industries is based. Is this part of potential SBD expansion plans, or coincidental job openings?
Stanley Black & Decker is clearly looking towards securing future growth and expansion potential. How will competitors response? The next few years will surely be interesting.
The yeti
Oh no ! Prices will go up because of this .
Waterloo was making good boxes for cheap. Now Stanley will just charge more
Stuart
Where’s the logic there?
I see 3 possibilities:
1) Give users more for the money.
2) Give users the same quality for less money.
3) Give users more for less money.
Let’s generalize and say that every supply chain entity wants to make $1.
Before:
A products costs $1 to make.
Waterloo sells it to a brand for $2.
The brand sells it to the retailer for $3.
The retailer sells it to the customer for $4.
Now, Waterloo is within Stanley Black & Decker.
So maybe they design the product better, increasing the cost to $1.25 while the end user cost is unchanged. Or they leave it the same, lowering the end user cost and still receiving more profits. Or they can better the product and lower the cost, and still have more profit since there’s one pocket to feed instead of two.
I think that they should go for the “more for the money” route, packing better quality and more innovations into the same price points.
The yeti
Takes away competition. The waterloo branded boxes could be had quite reasonably. Now there will only be SBD boxes at SBD prices
Steve
They still have to compete against all those other non-SBD brands so I don’t think a big price increase is coming.
Stuart
https://www.usitc.gov/press_room/news_release/2018/er0103ll884.htm
Some other brands might have to increase their prices soon.
Steve
In light of the tariff, you’re right other brands would have to raise prices. I don’t agree with those who think SBD will raise prices. They still have to compete. I would guess SBD will hold the line on prices which would put them in a much more competitive position vs. the competition.
taras
I don’t see any more “value” or “discount” coming with this acquisition. When they acquired Irwin, there were no value-added features to any of their existing product, nor did anything change product wise. Same with the Lenox aquisition. I think that all we’ll see is business as usual. They are in the business to make money, and now that they are controlling more and more of the marketshare, then offering less for more is a position that they will have more controll over.
I see most of their lower tier products as being overpriced anyway, and the higher end stuff is priced to compete with what’s around them. At the high end, they aren’t looking to offer better value, and with their premium stuff, are actually pushing product technology forward (a very good thing), but also pricing it slightly above the competition most times as well.
I think the only change we’ll see from any of their multiple acquisitions down the road is parroting products under multiple brand names, like this
http://www.lenoxtools.com/pages/screwdrivers.aspx
http://www.irwin.com/tools/screwdrivers/9-in-1-multi-tool
They are already doing it across other brands and products before these two were acquired. Neither of these got cheaper or went on sale more often after the acquisition.
Toolfreak
Stanley could just have Waterloo make the same Craftsman boxes they did a decade or so ago, get rid of the low-end stuff with the cheapo slides and thin sheet metal, keep the “Pro Series” stuff if it sells (as gimmicky as it is), and of course, move all production back to the USA, including for the portable boxes.
There’s really not much they need to do. The boxes are designed already and are good (though I would, as always, like to see designs with more shallow 2-in. drawers) They just need to use the slightly thicker sheet metal instead of cheaping out and getting the thinnest stuff that will barely hold together, and only use the 50, 75/85, 100lb rated drawer slides, and not ever use those cheap slides that hold 25lbs.
Thick metal, quality slides, USA-made, at a decent price. Not that hard to do.
Chance
I agree, we need to see more shallow drawers in these new boxes.
That Guy
I’ve had a Waterloo box for maybe 17 years now… paid $900 and that was an insanity amount of money for me at the time, but still +1500 cheaper than Mac or Snap-On. I still have it and other than being dirty, it is still rock solid and has been a great investment.
I wonder how pricing/quality might be effected now?
Diplomatic Immunity
Oh great the songs popping into my head just keep coming. Don’t they have enough toolbox brands already? Where does this slot in the Porter Cable, Lenox, Dewalt, etc toolbox section?
Stuart
SBD offers a number of tool storage products, and manufacturers range of industrial and professional tool boxes, but they have previously worked with outside OEMs for retail market tool boxes. They didn’t produce Porter Cable (that one model) or Dewalt tool boxes themselves.
So until the recent Lenox tool cabinet at Lowes, Dewalt and other SBD brands’ tool boxes at Home Depot and Lowes were made by other companies.
Diplomatic Immunity
Ok. So they’re moving towards more of an inhouse sorta solution nowadays it seems.
michaelhammer
Stuart, you are quite the sleuth. Job openings in Missouri? I’m with you, this should get quite interesting. With LED lighting and Bluetooth speakers, this is not your father’s tool box. And if they are partnering with Amazon…”Alexa, where is my socket set?” Diplomatic immunity can actually play all those crazy songs in his head.
Stuart
https://www.linkedin.com/jobs/search/?keywords=stanley%20black%20and%20decker&location=sedalia%20mo&locationId=PLACES.us.9-4-0-80-6
Once you know what to look for, things just pop up. Drawing conclusions is the hard part.
Harry
I thought the main Waterloo plant was moved to Mexico more than a few years ago? They were making Cornwell boxes there. Did they move production back to the USA?
Toolfreak
Some of the production for the Waterloo chests and the portable tool boxes were moved to Mexico years ago, then the portables went to China production and there’s a few top/bottom chests made in Mexico.
Chris Gutierrez
Maybe I’m naive, but Waterloo (Craftsman) boxes have served me really well. And with the Craftsman decline I have had little opportunity or desire to search out a new addition to the garage.
But now, I have hope for a new Craftaman box to match the old or an alternate brand from the family with similar, familiar feel.
Honestly, I like the grip latch better than any magnetic closure. And, I know it doesn’t make me any more productive, but matching or at least consistent themed tools helps to satisfy whatever level of ocd I have.
I’m sure this will just bring more options to SBD, and who doesn’t like options.
Chance
The griplatch boxes are fantastic!!
Toolfreak
Interesting this is such a big secret. Not sure why SB&D would want to keep this so hushed.
It makes a lot of sense given their Craftsman aquisition, now they can make the same ‘ol Craftsman boxes, too.
I just hope they bring ALL Waterloo production back to the USA. The portables are now made in China, the cheaper lines are made in Mexico, and the premium stuff is harder to find or get at a decent price, and the Craftsman offerings went to the gimmicky stuff instead of just being rebadged Waterloo.
I’m hoping Stanley won’t screw this up, but honestly I’m worried they will do strange things instead of just making simple, basic, modern USA-made Craftsman tools and storage.
Gary
According to the Cedar Valley Business Monthly (Nov 2015), they already have … “Over the years, WI also has had plants in Pocahontas, Ark.; Muskogee, Okla.; and Nogales, Mexico, but it has consolidated all manufacturing operations in Sedalia.”
And the fact that they didn’t disclose the acquisition with their Q2 or Q3 earnings releases can only mean that it was a relatively small (i.e., immaterial) acquisition.
Toolfreak
They still make some of the higher-end Waterloo stuff in the USA, but the portable hand boxes are made in China and the low-end stuff is made in Mexico.
I’d like to see them bring it ALL back here. It wasn’t that long ago that every single Waterloo and Craftsman/Husky/Kobalt branded tool storage product Waterloo made was made and assembled in the USA.
They use imported drawer slides and casters and stuff like that, but the sheet metal was U.S. Steel stamped and shaped and otherwise made in USA.
Brent
Just FYI, when a public company does an acquisition, they will typically announce it if they feel there’s a PR benefit. It’s surprising that they wouldn’t find some PR benefit to announcing the deal.
The only time that they are legally REQUIRED to announce an acquisition is if it is “material” to their financial results. In other words, if Waterloo is either so profitable or is losing so much money that the earnings per share (or another key financial metric) would be affected. There is no set formula for determining whether an acquisition is material. The accountants and lawyers have to look at a bunch of different stuff.
SWK did about $13 billion in revenue in 2017. If we say hypothetically that Waterloo did $200 million in revenue and it was minimally profitable, then it’s possible that the accountants would say that the deal is not material. I’m not familiar with the tool business in general or I’d have some idea what the practice for announcing deals would be for that industry. Most of my Wall Street career involved investing in tech companies, and a deal this size sold to a company the size of SWK would always be announced, and would probably be considered financially material if it was more than $10 million or $20 million in sales.
Stuart
I thought that they were required to announce acquisitions to investors and the SEC.
It’s not listed here, either – http://www.stanleyblackanddecker.com/our-businesses/our-brands
Maybe this is because Waterloo isn’t and wasn’t a public-facing company? If it’s just considered a factory, then maybe that’s why?
jec6613
Also, vertical integration is usually something that has a PR benefit. Buying the company that makes your stuff is always a good idea for quality control – like Ford purchasing steel plants and such.
Gary
Public company vs. private company vs. asset acquisition is not relevant to the disclosure rules … every company has a materiality threshold that governs whether an acquisition or divestiture needs to be publicly-disclosed. When their 10-K is filed in 2-3 weeks, we will likely get additional information (purchase price, historical sales, etc.).
David Zeller
Man, how I would love to be on an advisory board for SBD and Craftsman. I know of other Purdue grads there. They should be down to earth and good guys. If they ever need help… 🙂
David
PatrickD
https://www.usitc.gov/press_room/documents/testimony/701_575_005_0.pdf
Sounds like a lot of drama.
Stuart
There’s a LOT of interesting commentary in those and other related documents. Some of it made me feel like I’m reading someone’s diary.
One thing I can’t find is The Home Depot’s preliminary statement. Perhaps that’s one of the documents that was not made public. Other documents, like completed questionnaires, are held confidential to protect private business information.
OhioHead
Please continue to post/update us with information about this lawsuit; I read the document as Sears/other retailer is suing Waterloo?
Stuart
It’s not a lawsuit.
As I understand it, Waterloo petitioned the US International Trade Commission to investigate potential anti-dumping and unfair pricing practices of tool boxes imported from China and Vietnam, saying it was hurting their business.
Other parties, including those that would be affected by any resulting tariff increases imposed on such products, argued among other things that Waterloo’s difficulties or loss of business and sales resulted from other factors in their control. In other words, they said Waterloo’s problems were their own fault.
The final ruling that I read says that the commission has found that these imported products were being subsidized by the Chinese government, and that countervailing measures would be required to balance things out to be fair and protective of US-based industry.
OhioHead
^ sorry read a bit more of the 250+ pages posted earlier, US manufactures fighting dumping of cheap imports…….did I read correctly that SBD announced the closing of the MO factory or just moving the Waterloo “industrial” manufacturing to Ohio?
Stuart
I read that part more as intent, but they also have recent job openings in Missouri where Waterloo is located, contradicting what’s said there.
Matt
Being from the Waterloo area, I wish they’d move production back home here to where it all began… Regardless, I see this as good news. All of my tool storage is or has been Waterloo my entire life. Even the few Craftsman boxes I just ‘had’ to have because they went with my Craftsman tools when I was younger I wouldn’t have purchased had I known they were not built here by Waterloo Ind. That was the great thing about Craftsman for those of us in the midwest, When you bought American Made Craftsman tool boxes or storage, you were supporting Waterloo Industries.
When they moved away and then partially out of the U.S., there were some bad feelings towards their products. It was very similar to Craftsman when Eddie decided to off shore everything. Waterloo & Craftsman were like old Chevrolet.. American as American could be and people were proud of that fact. When it’s no longer American and the other equally bad (no longer quality built to last), people were no longer supportive. Perhaps SBD can fix this whole mess of both Craftsman and Waterloo. It makes me pretty hopeful to be honest, knowing that Craftsman and Waterloo will be eternally linked again.
I also agree with others, ditch the cheap stuff. I know several people who have bought Craftsman boxes of the last few years and have had nothing but horrible experiences. They are built so flimsy and cheap. Not so with stuff from even 20 years ago. Which is about how old my last Waterloo set is. I’m not saying the steel has to be as thick as something from the 40’s/50’s (although a retro set like the 1950’s era round cornered Craftsman boxes with heavy steel would be awesome), but at least get it back to where they were a couple decades back. I’m genuinely happy to hear this news! Our Sears just got the axe so I hope to see this stuff at Lowes and/or Blains.
Bret
Glad to see another person from the Waterloo area. I agree that it really would be nice if Waterloo boxes were quality and made in Waterloo, Iowa again.
Also, the Sears has been going downhill for so long, it’s sort of a relief that it’s being put out of its misery.
Jeff White
Are there still offices in Waterloo? I’ve been through the area, didn’t know if it was just manufacturing that moved or everything
Bret
They have at least a local office in downtown Waterloo at 100 E. Fourth St. Here’s more info I found from the recent newspaper article:
“Waterloo Industries has 14 employees handling sales, marketing and product development in Waterloo.”
http://wcfcourier.com/business/local/waterloo-industries-under-new-ownership-no-changes-planned-for-local/article_5fde752c-2815-5005-8126-e5d5785ab0ef.html
Donald
They’ll possibly take the brand up market and sell the American version here, everything else will be made in Mexico. Or this plant will be closed and it will all go to Mexico. I’ve been to the plant. Not much to it. Given black and deckers track record and Stanley tools having gone down the toilet and made overseas? I’m betting bye bye factory in the US. If they do stay expect the state or Trump to give them a sweet tax deal which will keep them here for however long the deal is good for.
As for boxes? Harbor freight all day. Don’t know where they are made or by whom, but the price and quality can’t be beat. Look up Waterloo boxes. Insane prices and they sell the exact same ones as other brands for less. Makes no sense. As I said I have been there. I have seen what comes off the line and the only difference are what name goes on it.
fred
While you said Waterloo was a privately held company – I believe that they had been owned by AFI Partners since 2015 – and prior to that by Fortune Brands
The AFI website still lists Waterloo – curious??
https://www.afipartners.com/investments
Stuart
Companies can be very slow to update things like that, or perhaps the sale was quiet on both sides. SBD has not listed Waterloo on their corporate websites yet either, at least not as of the last time I checked.
Scott
Can anyone tell me if my recently purchased Craftsman box is a Waterloo? It’s one of the funky black ones with the red drawer handles.
Stuart
Do you have a link or photo?
Scott
https://14cyiuhvcgv.com/sears-craftsman-65-inch-13-drawer-workbench/%3C/a%3E%3C/p%3E
Scott
If anyone cares, it is a really nice box. We have similar SnapOn boxes at work that I feel are comparable in quality.
Stuart
I’m sorry, I really cannot tell. Anybody else?
Scott
Thanks for giving it a look.
Jeff
The only place online mentionng this aquisition is Tool Guyd. As it allegedly happened last year, I would think the news would be easier to confirm. Waterloo was just sold by Fortune to a private equity company in 2015.
Stuart
That’s because we’re good at what we do. =)
SBD has been inexplicably quiet about the acquisition. Thus, financial news media outlets all missed it.
Kinda-anonymous
Current employee.
Yes, SBD bought Waterloo in July of 2017. The acquisition was rather quicker than expected, but AFI had quite a few companies touring the facility in the months leading up to the sale.
Re-investment in the plant has been impressive and somewhat aggressive. I do not work in product planning – so I do not know much about planned future features, but I do know that attempts are being made to source everything domestic, particularly for premium lines.
The modular launch has been a hurdle and a half, though technically smoother than the black/yellow pro series a couple years ago. There is a 63″ box coming as part of the core of the line. That length used to only appear in the industrial line.
To give you an idea… 3 year plan is to roughly double the capacity of the facility and get to around 700 floor employees compared to the present 500. There are some growing pains. The factory’s future has been in limbo for the past 10+ years and with frequent layoffs/expectations of closing, those who know manufacturing understand what that does to a business.
As for concerns about value… One of the key advantages of having such large brands to supply is that we can make better use of tooling costs and labor time by designing around volume. The spreadsheet warriors up in sales seem to think we have doubled capacity already, and they still expect it to increase in demand. Prior owners were hesitant to invest in hard tooling for both new designs or parts they could divert through a series if manned presses. Simply put – we are a drawer factory, not a tool box factory.
We can turn out thousands of parts an hour on an auto press, or dozens (depending on the number of holes) through a laser. In theory, SBD will be optimizing the plant for product output at a volume where hard tooling costs are minimal relative to price at the end of the line.
It also means that changes in box design can be more aggressive as the relative tooling cost for a large/small run is lower. New dies for all new designs versus die mods or sub-ops for design mods.
Lane Powles
Need draw slides for Craftman’s tool box model 706-6569090, part T14009A2. Do you carry?
Stuart
No, sorry.
Richard Fallstich
You probably have to go through sears parts direct. God help you, I have been restoring a couple of Craftsman boxes over the past few years and got great service from Waterloo directly. Sears never had anything in stock and charged my credit card immediately for back-ordered items. Waterloo made much (if not all) of Craftsman storage, now Waterloo doesn’t publish any contact info for their factory in Sedalia, MO. I had phone no.- (660) 826-0960 in MO, but don’t know if it’s still working.
Richard Fallstich
I don’t know where that big Lenox tool cabinet pic came from, but many things have changed in late November 2018. Any Waterloo URL now redirects to one page which instructs you to go to DeWalt, Craftsman, or Stanley. It looks like the Waterloo name will be retired. They really made it official now. The Lenox Website only shows soft-sided tool holders, no metal boxes or carts at all.
Rod Carruthers
I didn’t know about the acquisition. However, I need some help with taking out the drawers on a Waterloo Industries “Hyper Tough” rolling 4-drawer tool chest. I have a jammed drawer, but have not discovered how to unhook the drawer slides. I would appreciate some suggestions, or just the “key to the lock.” I can pull any of the drawers out as far as they will go (there is no trigger or lever to pull up or down on). It’s got to be easy.
Please help me. thanks, Rod Carruthers
Stuart
Have you tried removing drawers above and below (if possible) to see what the problem is? Unfortunately, I’m not sure else could be done, it’s hard to say without seeing images.