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(Reuters) - Power tool maker Stanley Black & Decker Inc (SWK.N) is working with investment bank Goldman Sachs Group Inc (GS.N) on a sale process for its mechanical locks business, which could fetch as much as $1 billion, according to people familiar with the matter.
The sale process comes as the New Britain, Connecticut-based company has reignited its deal-making engine, breaking a two-year acquisition lull with a $1.95 billion agreement this week to acquire Newell Brands Inc's (NWL.N) tool business.
The divestiture process for the unit, which sells and installs locking mechanisms and keying systems, would allow Stanley to raise cash by divesting what it sees as a non-core asset.
That business has not performed as well as competitors with more scale, such as Allegion Plc (ALLE.N) and Assa Abloy AB (ASSAb.ST), and Stanley has been more focused on growing its electronic security systems.
The locks business has 12-month earnings before interest, taxes, depreciation and amortization of around $70 million, the people said this week.
Stanley and Goldman Sachs declined to comment. Asked by an analyst on a conference call on Wednesday about the company's review of its security business, Stanley Chief Executive Jim Lore would only say that "it will play out in the coming months, and that could be another source of funds if it goes in that direction."
The tools acquisition that Stanley announced this week is its biggest deal since it was created through the $4 billion all-stock merger of Stanley Works and Black & Decker Corp in 2010. The company had said in 2013 it was pausing deal-making for two years, as it sought to pay down debt and improve operations.
In its first-quarter earnings call, Stanley said it would continue to consolidate its global tools and storage business, and was optimistic about international opportunities for its industrial fastening business.
Reporting by Greg Roumeliotis and Lauren Hirsch in New York; Editing by Tom Brown