CORRECTED(OCT 9)-UPDATE 3-Spectrum buys Stanley B&D unit for $1.4 bln, shares jump

(Corrects identity of S&P Capital IQ analyst in paragraph 11)

* Expects deal to add $0.75-$0.80 to pro forma EPS in 2013

* Stanley B&D unit generated sales of about $985 mln for year ended June 30

* Spectrum shares rise as much as 14 percent

Oct 9 (Reuters) - Spectrum Brands Holdings Inc will buy Stanley Black & Decker Inc's door lock and bath fixture business for $1.4 billion, adding brands such as Kwikset and Price Pfister to a line-up that includes Rayovac batteries and Remington shavers.

Shares of Spectrum rose as much as 14 percent to their highest since the company emerged from bankruptcy in 2009, as investors welcomed the boost in earnings the deal promises.

The acquisition, Spectrum's biggest ever, will boost its revenue by a quarter.

"This is a good acquisition for Spectrum Brands that will increase total revenues to over $4 billion," Spectrum Chief Executive Dave Lumley said in a statement.

Stanley Black and Decker said in August it was reviewing strategic alternatives for the unit so it could concentrate on higher margin businesses such as hand and power tools.

These businesses fall under Stanley Black & Decker's Consumer and Do-it-Yourself segment, which generated more than half of the company's revenue of $10.4 billion in 2011.

The locks and bath fixture business accounted for 9 percent of the company's revenue in 2011, generating net sales of about $985 million for the 12 months ended June 30.

The deal will add between 75 cents and 80 cents per share to Spectrum's pro-forma earnings in 2013, rising to more than $1.00 per share in 2014, Spectrum said. For 2012, analysts have estimated earnings of $2.41 per share, before items.

BWS Financial analyst Hamed Khorsand said investors were encouraged by the prospect of new growth opportunities for Spectrum as well as the boost to earnings the deal provides.

Stanley Black & Decker's shares slipped 0.75 percent in late morning trading on the New York Stock Exchange.

"We think the sale will aid (Stanley Black & Decker) by adjusting its business focus, and provide it with cash for share repurchases, debt reductions and its planned acquisition of Infastech," S&P Capital IQ analyst Michael Jaffe said in a note.

The company is in the process of buying privately held Infastech, a Singapore-based maker of engineered mechanical fasteners, for $850 million to expand in emerging markets.

Stanley Black & Decker makes hardware, hand and power tools and industrial equipment. The company was created in 2010 through a $4.5 billion merger that combined Stanley's black-and-yellow hand tools with Black & Decker's power tools.

Under the deal, Spectrum will also acquire some assets of Tong Lung Metal Industry Co Ltd, a Taiwan manufacturer of residential and commercial locksets.

Spectrum, whose products also include Cutter bug spray and George Foreman grills, already sells Black & Decker brand small home appliances under a licensing agreement.

The company will fund the deal with a term loan of about $1.8 billion and with financing from Deutsche Bank and Barclays, the company said.

Reuters reported in September that Stanley Black and Decker was in final discussions with Spectrum to sell the business, after Apollo Global Management LLC dropped out of the bidding.

Spectrum's shares were up 11 percent at $45.73 on Tuesday on the New York Stock Exchange.

(Reporting by Siddharth Cavale; Editing by Saumyadeb Chakrabarty)