The new combined business is expected to have revenues of $US2 billion and will include the well-known Schlage brand of locks and other access control products. Other brands in its portfolio include LCN, Von Duprin, Interflex, CISA, Briton, Bricard, BOCOM Systems, Dexter, Kryptonite, Falcon and Fusion Hardware Group.
The move follows reports that activist shareholder Nelson Peltz, whose Trian Fund Management reportedly owns 7.3 percent of IR stock, was pressuring IR to divest its security business. In December 2011, IR sold its integration business to Kratos.
Noting that ASSA ABLOY and IR are “really the dominant players in the locking market,” an IR spokesperson said that as a pure-play security company the opportunity exists for the new entity to be “more focused, more nimble, more responsive and closer to the channel.”
After the spinoff, IR will be a $US12 billion company. IR Chairman and CEO Michael Lamach said in a prepared statement about the new security company that “both companies will be able to allocate capital and deploy resources in a more focused way.” He also said the new security company will be positioned to “build scale and make necessary investments for the future.”
IR also announced a $2 billion share repurchase program that will begin in 2013 and be completed in Q1 of 2014, and a 31 percent increase in its quarterly dividend. IR purchased Schlage, Von Duprin and LCN in 1974. It has acquired a number of other brands since that time and has had a stand-alone security business segment since the late 1990s.
